Media ININ Economy We Trust
Abu Dhabi 22-10-2019
The Federal Tax Authority has confirmed that as of December 1, the minimum standard price for tobacco products will be applied and updated in electronic systems in the e-services portal of the Authority under the Council of Ministers’ Resolution No. 55 of 2019 on the selective price of tobacco products, which stipulated that the selective price should not be less than AED 0.4 (40 fils) per cigarette roll, and not less than 0.1 AED (10 fils) per gram of hookah tobacco, honey, ready-to-use tobacco and other similar products.
The Federal Tax Authority stressed that the application of a minimum price of selective cigarettes and other tobacco products comes to achieve two strategic objectives, the first is to protect consumers and society from bad products that are more harmful to public health and the environment, and the second objective is to prevent price manipulation for the purpose of tax evasion.
She pointed out that under the Council of Ministers’ Resolution No. 55 of 2019, it is stipulated that the minimum standard price, for example for a pack of 20 cigarettes, should be 8 dirhams, and that the minimum standard price for hookah tobacco, ready-to-use tobacco and other similar products AED 25 per 250 g (AED 100 per kg) for all brands of cigarettes and other locally traded tobacco products.
She pointed out that the decision of the Council of Ministers No. 52 of 2019, which comes into force on the first of December 2019 came within the framework of government measures to accelerate the pace of building a safe and healthy society by reducing the proportion of consumption of goods that harm the health of community members, and affect the quality of the environment, as well as increasing Financial resources to support government expansion of services to citizens and residents and to maintain the highest levels of welfare, noting that by the decision a 100% selective tax is imposed on tobacco and tobacco products, liquids used in electronic smoking devices, electronic smoking devices and appliances, S energy, and 50% on soft drinks, and sweetened drinks.
According to the Council of Ministers’ Resolution No. 52 of 2019 on selective commodities and the tax rates imposed on them and how the selective price is calculated, the selective price is the highest among the declared price of the selective commodity by the Authority in its list of prices, if any, and retail price. Specified for that good less the tax included therein.
It noted that the specific retail price is the highest among the average retail price of the commodity after VAT, and the price of selective commodity proposed in the context of retail sale, which is defined, declared and affixed to the goods by the importer or producer after VAT. “ Selective commodity sale price proposed in the context of retail sale ” means the price realized when the selective commodity is sold for retail purposes directly to the consumer, and does not include cases where the price increases as a result of the sale of the selective commodity in a hotel, restaurant or similar establishment for consumption within those establishments.
According to the press release, the Authority may determine the procedures necessary to prove the classification of any product to ensure that it is a selective commodity, and may request the person to provide documents, laboratory or other proofs specified by the Authority to prove and determine the content of the product. If the person fails to provide the required supporting documents within the period specified by the Authority, the Authority may consider it a selective commodity to which the selective tax procedures shall apply, until proven otherwise.
In September, the Federal Tax Authority launched a comprehensive awareness campaign for selective taxpayers in all emirates during the month of September 2019 on the objectives and mechanisms of expanding the scope of the selective tax, and the registration procedures in the electronic system of the Authority, which included a series of introductory workshops for those concerned with the new decision. During this campaign, the Authority reviewed the continuous development processes that the Authority has implemented since the introduction of the Selective Tax in early October 2017, in the framework of the Authority’s keenness to strengthen its partnerships with all concerned authorities in the country. Government and private appeals for the successful implementation of the UAE tax system.
She pointed out that the “electronic smoking devices and tools” covered by the Council of Ministers Resolution No. 52 of 2019 are all electronic smoking devices and devices, and all liquids used in them and the like, whether they contain nicotine or tobacco or not, and under the Ministerial Decree No. 236 of 2019, impose Selective tax on electronic smoking appliances and liquids used in accordance with the relevant customs codes mentioned in the resolution.
