Excise tax on sugary drinks and cigarettes, all set to burn a hole in your pocket

Excise tax on sugary drinks and cigarettes, all set to burn a hole in your pocket

Tax on sugary products will result in huge savings on healthcare, according to doctors in the UAE.

UAE residents will have to pay more for sweetened beverages – including carbonated and energy drinks – cigarettes and e-cigarettes. The Federal Tax Authority (FTA) had announced that the new selective tax on the e-smoking devices (tools and liquids used in them) and sweetened drinks would be applied from December 1.

Medical professionals have hailed the new additional tariff on sweetened drinks and electronic smoking devices and tools starting today.

Excise tax on sugary drinks and cigarettes, all set to burn a hole in your pocket

Revenues raised from taxes can be used to promote health. In the UAE, the revenue generated by taxes could be spent on efforts to improve healthcare systems, encourage healthier diets, increase physical activity, or build capacity for effective tax administration, further increasing the value of this measure Low-income consumers and young people will get the highest health benefits in the long run.

Not only adults but also for kids, especially schoolchildren, will not have these substances at reach. Staying away from these products will have a positive impact on all cardiometabolic related diseases such as obesity, diabetes, dyslipidemia and also hypertension.

Parents are advised to encourage their kids to eat more at home, including more fruits and vegetables. Healthy snacks with natural sugar substitutes are the best option for kids.

Excise tax on sugary drinks and cigarettes, all set to burn a hole in your pocket

Major diseases from sugar consumption

Consumption of caloric beverages contributes to weight gain more than solid foods, because the body doesn’t compensate fully for beverage calories by reducing calorie intake from other foods. Adults who take one sugary drink or more per day are 27 per cent more likely to be overweight or obese than non-drinkers, regardless of income or ethnicity.

Preventing diabetes, obesity

Low-income groups are more likely to cut their consumption as opposed to the rich, as expected. Evidence shows that a tax on sugary drinks that raises prices by 20 per cent can lead to a reduction in consumption of around 20 per cent, thus preventing deadly diseases such as obesity and diabetes.

Furthermore, children can benefit immensely from the tax. Studies have shown that if sugar was cut in the sweetest drinks in response to the tax, levels of tooth decay, obesity and type two diabetes would fall, particularly among the high-consumption under-18s.

Risks of consumption of excess sugar drinks

  • Diabetes: Persons consuming sugary drinks regularly – one to two cans a day or more – have a 26 per cent greater risk of developing type 2 diabetes than people who rarely consume such drinks. The risks are even greater for young adults.
  • Tooth decay: Soda consumption is associated with nearly twice the risk of cavities in children and increases their likelihood in adults. Untreated cavities can lead to pain, infection, and tooth loss.
  • Heart disease: Men who drink one can of a sugary drink per day have a 20 per cent higher risk of having a heart attack or dying from a heart attack than men who rarely consume sugary drinks. A related study in women found a similar sugary drink-heart disease link.
Excise tax on sugary drinks and cigarettes, all set to burn a hole in your pocket

Know the new taxes on smoking

  • All electronic smoking devices and tools, whether or not they contain nicotine or tobacco, which would be classified on import under Customs HS codes: 85437031, 85437032, 85437039
  • All liquids used in electronic smoking devices and tools and the like, whether or not they contain nicotine according to the Customs HS codes 38249999.

Burning a hole in your pocket

AED 8 – New minimum price of a 20-cigarette pack. A cigarette pack which was available for AED 4 will cost double

AED 25 – Minimum price per 250 grammes of waterpipe tobacco and similar products

Fils 40 – The UAE Ministry of Finance announced in October that each individual cigarette will cost buyers at least 40 fils extra

100% – Excise tax on tobacco and tobacco products; electronic smoking devices and liquids; and energy drinks

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