Understanding excise tax in UAE today is of paramount importance. UAE has always been synonymous with no taxes for businesses or individuals. However, recent changes in the taxation landscape reflect a strategic move to diversify the existing streams of income. Amidst these changes, understanding the relevance of excise tax is looked upon as a notable component in UAE’s efforts to enhance its financial strategy
Excise Tax: What is it?
Excise tax, also known as selective tax is an indirect tax that is imposed on specific goods at the point of sale or production. This tax is majorly restricted to items that pose a serious threat to human health as well as our environment. These ‘excise goods’ mainly encompass aerated beverages as well as carbonated drinks. These drinks are known to contain stimulants like caffeine, taurine, etc.
Furthermore, tobacco products also fall under the list of ‘excise goods’. Since its implementation, excise tax has emerged as a major revenue income for the UAE government. Besides safeguarding public health, it also regulates consumer behavior. By imposing higher tax rates on potentially hazardous goods, the government aims to discourage the use of such products.
The continuous improvement of the excise tax regulations in UAE however underlines the counties’ commitment to staying up-to-date with international trends while aligning its policies with the contemporary challenges.
Present Impact of excise tax on UAE economy
Since its implementation in 2017, UAE has witnessed a host of positive successful outcomes, including an increase in the percentage of tax registrants by a whopping 375% as stated by the FTA. Furthermore, the number of goods registered under excise tax also saw a drastic increase of 71.38%. The decision to expand the scope of excise goods was also taken into immediate consideration, after its positive impact on the economy.
Businesses and startups have also contributed significantly, by diligently meeting the requirements for the successful implementation of excise tax. To sum it all, the UAE economy has witnessed the following positive changes:
- Reduced consumption of harmful goods
- Increased revenue for the UAE government
- Better lifestyle choices
- More sustainable practices
Payment Process for Excise Tax in UAE
There are multiple options available to make payments for excise tax in the UAE.
For instance, you can make online payments through the Federal Tax Authority ( FTA) website which allows businesses to register, file returns, and make payments online. Designated banks in the UAE are also available to make payments online. Emirates Wallet and Etisalat Wallet are also some E-wallets that allow you to make excise payments.
The Future of Excise Tax in UAE
The dynamic realm of the UAE tax landscape necessitates transformation for businesses to thrive. Businesses that stay abreast of the latest emerging tax regulations will easily be able to streamline their operations and navigate the everchanging tax landscape with ease.
The implementation of the Excise tax has not only been successful but has also highlighted the importance of maintaining a healthy lifestyle. It has been five years since its implementation and the last three years have witnessed an even higher surge in the excise tax registrants.
Thus, it is expected that in the coming years, the scope of excise tax will keep increasing as more and more people come forward to conduct their businesses in the ever-so-famous regions of UAE.
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