UAE begins collecting 'sin' taxes on tobacco, energy drinks

Beginning on Sunday, tobacco and energy drinks will be taxed at 100 percent and soft drinks at 50 percent. Shoppers could be seen stocking up the day before.

The new tax push comes as the UAE and other oil-rich Gulf nations have struggled with low global energy prices. The UAE will start collecting a 5-per cent value-added tax on certain goods in January.

All six members of the Gulf Cooperation Council have agreed to begin collecting so-called VAT taxes, though others may begin later than January.

The GCC includes Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE.

The Government hopes pushing up prices will encourage people to turn away from unhealthy products like cigarettes and fizzy drinks, which place a heavy burden on the health service and contribute significantly to diseases like diabetes and cancer.

The new taxes will also contribute millions of dirhams to the UAE budget and will be followed by the introduction of VAT of five per cent on many products and services in the New Year.

The UAE is the second country, after Saudi Arabia, to attempt to deter the consumption of unhealthy products with steep price increases, with many other governments around the world considering similar tactics.

Smokers and lovers of sugary drinks will find their wallets significantly lighter this Sunday - but will hopefully emerge much healthier and fitter as a result.