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Selective Tax Applied on Over 1,600 Items in UAE | ASHARQ AL-AWSAT English Archive 2005 -2017
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Khaled Al Bustani., director-general of the Federal Tax Authority. WAM

Dubai- The number of commodities covered by the UAE’s selective taxation has been announced as 1,610 items, 60 percent of which are classified as soft drink products, 26 percent as tobacco and its derivatives, and some 14 percent as energy drinks, all deemed as the most damaging to the public’s health, the UAE announced Sunday.

The Federal Tax Authority has prepared a list of taxable commodities to assist in the collection process by the authorized parties, the manufacturing companies or importing companies.

The number of items on the list is subject to increase in the future if new brands of tobacco products, soft drinks or energy drinks are introduced to the market, and the selective tax rate varies between 50 and 100 percent.

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, and the number of energy drinks was set at 219 items.

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 seven billion dirhams annually after the collection of the selective tax.