UAE Moves Towards 50 Percent Soda Tax and 100 Percent Levy for Energy Drinks
25 May 2017 --- The UAE is introducing new fiscal measures to tax carbonated drinks by 50% and a 100% tax hike on energy drinks.
The levy will be applied to the retail price of the drinks and comes into force during the fourth quarter of 2017, according to the Ministry of Finance.
The UAE is imposing the taxes as part of a package of measures which will also see tax introduced on tobacco products.
The tax on high-sugar products is a different strategy for UAE which has historically avoided taxing the sale of products directly.
It comes as more and more countries around the world introduce tax on sugary and fizzy drinks.
And this is a more aggressive strategy for tackling high-sugar products in the same vein as Mexico’s $0.05 per liter tax on sugary soft drinks, approved in 2013.
Last October, the World Health Organization (WHO) also urged all countries to consider introducing such levies as an effective way of curbing the rising obesity rates, particularly for children.
The UAE tax could bring in around US$200 million in a year, estimates suggest.
Taxes will be payable on a monthly basis and businesses should not stockpile, say UAE government officials.
Countries like Saudi Arabia, Kuwait, the United Arab Emirates, Qatar, Bahrain, and Oman have high smoking levels as well as high rates of obesity and the associated health problems. The government is looking to stem the rising numbers, claiming the tax will incentivize consumers to switch to a healthier lifestyle.
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