Tax hurts trade

Implementation of an excise tax has caused Abu Dhabi’s trade in raw tobacco and manufactured tobacco products to decline sharply in 2017-2018, according to the Emirates News Agency.

In October 2017, the UAE began applying excise tax on a selection of unhealthy products. Tobacco was subjected to a 100 percent excise tax while carbonated drinks and energy drinks received 50 percent and 100 percent, respectively.

The value of Abu Dhabi’s tobacco trade dropped to around AED62.4 million in 2018, compared with AED410 million in 2017, according Statistics Center-Abu Dhabi.

Re-exports, valued at around AED57.5 million in 2018, represented 92 percent of the total trade in tobacco products.

During the same year, imports of tobacco products were value at around AED2.5 million while the value of exports amounted to only AED2.4 million.

The final quarter of 2018 witnessed a decline in Abu Dhabi’s trade in tobacco and its derivatives by 53.4 percent.