Finance announces the amendment of the Cabinet decision on selective goods and the tax rates imposed on them

Dubai 21-08-2019
The Ministry of Finance announced the details of the amendment of the Council of Ministers Resolution No. / 38/2017 on selective commodities and tax rates imposed on them and how to calculate the selective price in addition to goods currently subject to selective tax / ie tobacco products, soft drinks and energy drinks / where the selective tax will also be imposed On electronic smoking appliances and liquids used in those devices and drinks sweetened with added sugar.
The decision to amend the selective commodities and the mechanism of applying the tax included in it is in compliance with government directives to rationalize consumer behavior related to harmful products, which contributes to raise the public health level of the community members and reduce the negative health consequences caused by these products. This decision is in line with the UAE’s commitment to implement the unified tax agreement. Selection of the Gulf Cooperation Council States and supporting efforts to achieve economic integration among the GCC States.
The Minister of State for Finance pointed out that these new amendments to the Cabinet’s decision on selective tax come within the framework of the UAE’s keenness to reduce harmful consumer practices by establishing a legislative and procedural base that supports national efforts to reduce unhealthy practices that cause chronic diseases.
He said that these amendments are based on the government’s orientation that the tax policy of selective tax should target consumption patterns harmful to public health in order to supplement efforts to raise awareness about the harmful effects of consumables harmful to health and contribute to strengthening the work of the health system in combating communicable diseases and reduce the cost of treatment and enhance community health. Motivate individuals to effectively spend and reduce the negative impact of harmful substances on the environment as well as stimulate producers to develop better alternatives.
According to these amendments, which will be implemented from January 1, 2020, the 100% selective tax on electronic smoking devices and liquids used in these devices and 50% on beverages sweetened with added sugar has been identified in addition to the existing selective commodities, including tobacco and tobacco products. / 100% / Energy drinks / 100% / Soft drinks / 50% / Selective price calculation mechanism and retail price calculation mechanism have been determined provided that the Federal Tax Authority has the authority to determine the procedures necessary to prove the classification of any product to ensure its classification within the goods Selectivity.
At the same time, the Cabinet decision set the minimum standard price for tobacco products, which set the selective price of tobacco products not less than 0.4 dirhams per roll of cigarettes and 0.1 dirhams per gram of hookah tobacco, ready-to-use tobacco and similar products. Implementation will begin before 1 January 2020.
HE Obaid Al Tayer said that the Ministry of Finance has conducted in-depth studies on the direct and indirect negative effects of consumption patterns harmful to health, including tobacco products, electronic tobacco and sweetened sugar added to the Cabinet’s decision to correct these harmful patterns and provide appropriate legislation to regulate selective tax to achieve government goals To ensure the health and well-being of all members of the community and to achieve the third objective of the Sustainable Development Goals, which is to ensure the good health and well-being of the community members.
The studies on regulating the tax treatment of selective tax have been prepared in line with international best practices. These studies are based on the results of the data derived from the local market. The Ministry of Finance has also studied the economic and social impact of the selective commodities that have been added and referred to above, which have shown a positive effect in reducing consumption of harmful goods. Covered in the Cabinet decision has very little impact in relation to GDP and employment area which keeps the state competitive.
He concluded by saying that the Ministry of Finance continues to work and coordinate with all relevant authorities to prepare periodic studies on selective tax and ensure its optimal application in the country. The Ministry is also committed to strengthening the tax laws issued in the country and fulfilling all its obligations towards all commercial treaties and agreements concluded while continuing to develop its system. Legal and legislative, which enhances the status of the state in various indicators of global competitiveness.
It is noteworthy that the UAE started applying the selective tax as of October 1, 2017 where the special indicators in this regard pointed to the positive effects of the selective tax in terms of supporting efforts to achieve the goals of sustainable development and also in the face of unhealthy consumption patterns, which was the low rates of consumption of tobacco and products harmful to health. At the state level.