Definition

Excise Tax in the UAE is an indirect tax applied to products deemed harmful to human health or the environment. It is designed to discourage consumption of such products and generate revenue for public health initiatives.

Key points

• Applies to goods like tobacco products, carbonated drinks, and energy drinks.
• Tax rates vary: e.g., 50% on sugary drinks, 100% on tobacco.
• Paid by producers, importers, and stockpilers.
• Must be reported and paid through the FTA’s EmaraTax system.

Practical example

An importer bringing in 10,000 cans of energy drinks worth AED 50,000 must pay 100% Excise Tax = AED 50,000 to the FTA.

Why it matters

Excise Tax compliance is crucial for companies in affected sectors and impacts pricing and consumer demand.