UAE
Dubai Duty Free (DDF) has confirmed that new tobacco taxes do not apply to departing passengers from Dubai airports. Only arriving passengers will have to pay the new 100% excise tax on all tobacco products, and only if they purchase more than 400 cigarettes.
Departing passengers will, however, be subject to the same 100% excise tax on caffeinated sports drinks, and 50% on soft drinks that is now in place for the rest of the UAE.
Excise duty will be applicable in all airport shops for carbonated and energy drinks but DDF predicts there may be a spike in sales as airport passengers can take advantage of tax-free tobacco. According to a DDF spokesman, “All tobacco products will be free of excise on departures and will be subject to current customs allowances on arrival. Carbonated and energy drinks across all of our locations will be subject to excise as they will be presumed to be consumed after purchase.”
Cigar dealers in UAE say that the tax could hit their industry hard, as the most expensive cigars on sale double in price to AED700 (US$165). However, DDF says those cigars will be exempt in airports in Dubai.