Dubai: The UAE Excise Tax, due to go into force effective October 1, will be collected in e-Dirham only, the Federal Tax Authority has announced.
The UAE thus becomes the second GCC state after Saudi Arabia to apply excise tax, an indirect type of taxation which will help build a healthier and safer society.
As per initial estimates, the tax is forecast to generate up to around AED7 billion in annual revenues for the Federal Budget.
This tax is meant to discourage the consumption of products that negatively impact the environment and, more importantly, people’s health.
The revenues of the levies will go towards supporting advanced services for all members of society. It will reach 100 percent for tobacco and energy drinks and 50 percent for sugary fizzy beverages.
The Ministry of Finance launched the e-Dirham in 2011 to develop a system of electronic channels and digital payment gateways to collect service fees and revenue for the Federal Government via Prepaid Cards, in order to enhance the delivery of public services.
The cards offer a smart payment method for more than 5,000 government services in ministries, Federal and local authorities, and the private sector.
The e-Dirham G2 system implemented in 2011 is combined with world-class payment networks and schemes, via platforms configured to be flexibly integrated with e-Government service applications.
They can also be configured to work with online payment applications, payment via mobile phones, and electronic collection via different payment channels in line with universal standards.