Minimum price of pack of 20 cigarettes set at Dh8: UAE tax authority

The Federal Tax Authority (FTA) has called on all businesses registered for Excise Tax to comply with the minimum price that has been fixed for tobacco products and update it in the authority's system, as determined in Cabinet Decision No. (55) of 2019 on the Excise Price for Tobacco Products.

The decision stipulates that excise price cannot be set under Dh0.4 (40 fils) for one cigarette. Meanwhile, the minimum price for waterpipe tobacco (known in Arabic as 'Mu'assel') was set at Dh0.1 (10 fils) per gram.

The FTA stressed that enforcing a minimum excise price for cigarettes and other tobacco products serves to accomplish two strategic objectives: Protect consumers and the community from products that damage public health and the environment, and prevent price manipulation for the purpose of tax evasion.

The FTA noted that as per Cabinet Decision No. (55) of 2019, the minimum standard price for a pack of 20 cigarettes has been set at Dh8. Meanwhile, the minimum standard price for waterpipe tobacco and similar products has been set at Dh25 for every 250 grams (Dh100 per kilo). This applies to all brands of cigarettes and locally traded tobacco products.

In a press statement issued on Tuesday, the FTA asserted that Cabinet Decision No. (52) for 2019, which goes into effect on December 1, 2019, is part of UAE government's efforts to build a safe and healthy community by limiting the consumption of products that harm individuals' health, as well as the environment. These reforms also contribute to increasing financial resources to support the government's efforts to improve services provided to UAE residents and visitors, and ensure their wellbeing.

The decision places a 100 per cent excise tax on tobacco and tobacco products, as well as electronic smoking devices and liquids, and energy drinks. Meanwhile, carbonated beverages and sweetened drinks are subject to a 50 per cent excise tax.