UAE To Hike Tax On Tobacco

by Lorys Charalambous, Tax-News.com, Cyprus

06 February 2012

The UAE has proposed a nationwide tax on tobacco products and its derivatives in an attempt to reduce the sale of cigarettes across the Emirates.

Although the tax could be raised by as much as 30%, retailers do not believe that the sales of tobacco products will be largely affected, and that only a fundamental shift in social attitudes will drive down levels of smoking.

Currently, a pack of 20 cigarettes costs approximately AED7 (USD1.90) and is set to increase to AED9 with the new tax; still significantly lower than prices in Europe.

This is the latest attempt by the UAE to reduce its number of smokers; products already hold the popular health warnings about cancer and heart, lung and artery diseases.

The rise in tax had been considered by the health authorities for some time, but the only increase to have been applied in the past four years was by a mere AED0.50.

Even though there has been no news about how the new 'health tax' is to be implemented, it is expected that retailers will pass the tax onto consumers in the form of higher prices.

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