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The UAE on 1 October began levying excise taxes on a number of selected products, following in the footsteps of Saudi Arabia which introduced similar taxes in June ( MEES, 2 June ).
The excise taxes law is expected to generate Dh7bn ($1.9bn) in annual revenue for the federal budget, state news agency WAM says.
The UAE and Saudi Arabia are the first among the GCC member countries to levy excise taxes and have already indicated that they will implement a 5% VAT rate from January 2018.
The remaining GCC states are expected to follow suit later in the year. The excise tax law issued in August targets 1,610 products, with fizzy drinks taxed at 50% and tobacco products and their derivatives at 100%.