The cigarettes market in the U.A.E is going crazy and demand on tobacco has increased in the past month due to a 100% increase in taxes on cigarettes and energy drink!!
Grocery shops and smokers have started to stock up their cigarettes cartons to avoid the new sales tax which will be implemented as of October 1st. Some people started to pay in advance for grocery shops in order for them to reserve their cartons before the tax law is implemented. Since tobacco does not need any specific storage requirements, and they can be stored for a long period of time without expiring or getting damaged
However, an issue has aroused where the tobacco suppliers are limiting the number of cartons sold to shops and markets, and in return, the shops are having a difficult time meeting their regular customer demand.
Aside from the tax, the shortage of supply will also increase the prices of cigarettes a lot more than the regular prices, which will probably lead to U.A.E becoming as expensive as Europe in its cigarettes prices.
That will raise a huge issue for some people in the U.A.E due to the fact that a large number of the population are expatriates from European countries that were happy to be moving to the U.A.E where they can smoke as much as they want for cheaper prices. The new tax law will probably make them wish they never left their home country due to the amount of money they will be.
Also, the majority of the population who happen to be Indians and Pakistanis, that are known to be heavy smokers, will regret their decision in coming to the U.A.E due to the new tax rule. At least back home they could smoke for way cheaper than what the price of cigarettes will be next month.
Excise tax from October 1
On October 1, the excise tax will go into effect at a rate of 100 percent on tobacco and energy drinks that include stimulants or substances that induce mental or physical stimulation, such as caffeine, taurine, ginseng, and guarana. The tax also will go into effect on soft drinks, at a rate of 50 percent.
The new law mandates that businesses must be registered via the Federal Tax Authority’s interactive website.
What do residents have to say?
I bought entire stock of my brand
“I smoke about two to three packets of cigarettes a day. When the prices increase, I’ll be paying out about Dh75 a day on cigarettes alone. So yes, I’ve been stockpiling in advance. I went to a supermarket the other day and bought all the supply they had of the brand I smoke. I don’t agree with the increase though. ”
Abdulrahman Al Zarooni, Emirati
New tax will hit me hard
“Yes, I will be, and have been, stocking up on cigarettes cartons. The new tobacco tax is going to hit me hard because I am a heavy smoker. I smoke a minimum of three packets a day, so while I can save money (by stockpiling) I will. I already have a couple of hundred cigarettes in my house.”
Anthony William, Irish
I will start buying from Duty-Free
“I normally don’t smoke that much. I usually finish 20 cigarettes every two days, so I won’t be trying to stock up too much. But before the October 1 rule comes into effect, I will buy a few extra packets. I think from now on what I will do is mainly purchase my cigarettes cartons from Duty-Free as they won’t be hit with the tax.”
Sudipto Bhowmik, Indian
I welcome tax, it will cut down my habit
“I haven’t been bulk buying but I can see why some people have been especially heavy smokers. When the announcement was made, my initial reaction was ‘wow’. Doubling the price is a lot. But at the same time, I will use it as an incentive to cut down my habit. Now I smoke about 20 a day, but I might move over to the e-cigarettes now.”
Debojit Bose, Indian
The following information was provided by “Khaleejtimes” on their website: