Here’s what won’t fall under the UAE’s sin tax

sin tax, sugary drinks, shopping

More sugary drinks are to be hit with a ‘sin tax,’ following a decision by the UAE’s Cabinet earlier in August.

Now we can confirm what’s excluded from the new tax, which comes into force from 1st January 2020.

Not taxable – and good news for calci-yummy milk drinks – ready-to-drink beverages containing at least 75 per cent milk; ready-to-drink beverages containing at least 75 per cent milk substitutes; baby formula or baby food; beverages consumed for special dietary needs and beverages consumed for medical uses.

Both of the latter categories are defined under separate legislation, so you probably can’t claim your chuggable morning sugar hit is on doctor’s orders.

So, what will be taxed?

The Federal Tax Authority (FTA) has confirmed that the expansion of the 2017 list of taxable products will include any sweetened drinks “to which a source of sugar or sweetener is added and is produced as either a ready-to-drink beverage or as concentrates, gels, powders, extracts, or any other form that can be converted into a sweetened drink.”

They’ll all be hit by a 50 per cent excise charge.

Taxed at 100 per cent are electronic smoking devices and the liquid used in them – “whether or not they contain nicotine or tobacco.”

In October 2017 the UAE started levying excise tax, otherwise known as sin tax, on goods deemed harmful to health and the environment.

First to be affected were carbonated drinks, with a 50 per cent excise tax rate, and 100 per cent added on tobacco and energy drinks.

The FTA is calling on all businesses dealing with sweetened drinks register for excise tax with the authority’s new system. Vaping companies are expected to follow in the next phase.

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