100% levy to be introduced on e-cigarettes from January 1, 2020
The UAE’s tax on e-cigarettes could push people back into starting smoking, according to Jake Nixon, sales director at Quartz Business Media, organisers of the World Vape Show 2020.
In April the Emirates Authority for Standardisation and Metrology (ESMA) introduced new regulations to legalise the sale of e-cigarettes and vaping devices.
The vaping market in the Middle East and Africa was valued at around $267.9 million in 2018 and is expected to grow by around 9.74 percent each year between 2019 and 2024.
However, potential growth may be hindered by a decision from the UAE Cabinet last month to expand the list of excise taxable products to include electronic smoking devices.
Starting from January 1, 2020, a tax of 100 percent will be levied on electronic smoking devices, whether or not they contain nicotine or tobacco, as well as the liquids used in electronic smoking devices.
The move was made to reduce consumption of unhealthy goods. "The decision aims at reducing the consumption of harmful products that put the health of people and environment at risk," a government statement said.
But Nixon fears it may end up having the complete opposite effect.
He told Arabian Business: “We’ve seen the UAE Government increase taxes on multiple items in recent years. One concern I have is the sale of vaping devices was legalised to try and stop the unregulated devices, we worry that a price increase could push consumers to source products elsewhere or push them back to cheaper, more harmful habits, like cigarette.
“The tax rule comes into force next year so we’re not exactly sure how it will play out, but it’s something we will keep an eye on.”
The global vaping and e-cigarette market is set to be worth $53.4 billion by 2024, according to market intelligence company VynZ Research.
The World Vape Show will take place from June 3-5, 2020 at the Dubai World Trade Centre and will include over 50 international retailers, wholesalers and distributors from around the world.