ABU DHABI: The number of commodities covered by the UAE’s selective taxation has been announced as 1,610 items, 60 per cent of which are classified as soft drink products, 26 per cent as tobacco and its derivatives, and some 14 per cent as energy drinks, all deemed as the most damaging to the public’s health.
The Federal Tax Authority (FTA) has prepared a list of taxable commodities to assist in the collection process by the authorised parties, the manufacturing companies or importing companies. The number of items on the list is subject to increase in the future if new brands are introduced, if they are tobacco products, soft drinks and energy drinks.
The selective tax rate varies between 50 and 100 per cent.
In more detail, the number of commodities classified as soft drinks, according to the list prepared by the Federal Tax Authority, is 974, while those classified as tobacco products and its derivatives, reached 417. The number of energy drinks was set at 219.
The Federal Tax Authority announced earlier this week that selective tax collections will only be accepted in e-Dirhams, a decision that will boost the government’s efforts to adopt an electronic system, keeping the UAE up to date with the latest technologies, and providing a high-level of security and efficiency in electronic payments.
The UAE is the second Gulf country after Saudi Arabia to apply selective taxes, which is an indirect tax imposed on commodities that are harmful to public health or the environment.
The purpose of the tax is to limit the consumption of those commodities, while contributing to an increase in government revenues.
According to preliminary estimates, the authority expects government revenues to increase to Dhs7 billion after the collection of the selective tax.