New UAE tax comes into force today
The new levy will apply to electronic smoking devices.
A new tax on electronic smoking devices comes into effect today.
While an excise tax on vapes and e-liquids has been in place since 2019, the new levy introduces a minimum price on vaping liquids.
The new tax will allow the introduction of a minimum excise price of AED 1 per millilitre (mL) for liquids used in electronic smoking devices and tools.
The existing minimum excise price will continue to apply to cigarettes, water pipe tobacco, ready-to-use tobacco products, and similar products.
The Ministry of Finance first announced the decision on August 6. Its aim is to enhance the effectiveness of excise tax implementation and support compliance within the broader national tax framework.
A changing market
The new tax has been designed to keep pace with developments in the tobacco market and apply unified standards across all smoking products.
The UAE levies excise tax at a rate of 100 per cent on all tobacco products covered under the excise tax regime.
Analysts believe that the UAE has two primary aims with the introduction of the new tax.
Essentially, it wants to make the excise system more effective, but it also wants to discourage the consumption of vaping and related products.
The country’s Federal Tax Authority (FTA) explicitly describes excise tax as being intended both to reduce consumption of products considered harmful and to raise government revenue.
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