The implementation of excise tax on tobacco products in the UAE has led to lower sales and has driven many consumers towards unregulated – and now illegal – cigarettes that could be potentially harmful, according to Abdulla Al Gurg, CEO of the Easa Saleh Al Gurg Group (ESAG).
An ESAG company, Al Gurg Tobacco, has been the exclusive UAE agent for the British American Tobacco Company and its subsidiaries for more than 50 years, and claims to be the largest company of its kind in the UAE.
Among the brands that it distributes are Dunhill, Kent, Benson & Hedges and Lucky Strike.
In an interview withArabian Business, Al Gurg said the UAE’s introduction of 100 percent excise tax in October 2017 has “taken a toll” on cigarette sales, although he did not give specific figures for how it has impacted Al Gurg Tobacco.
“If you compare a pack of cigarettes here to a pack of cigarettes in Europe, it’s still five times the price there,” he added. “When you compare, a person who is aware and educated [will] see that it shouldn’t be that way (inexpensive in the UAE).”
Many smokers, Al Gurg said, have turned to unregulated, cheaper cigarettes available at “the old prices” still for sale across the UAE, even if they are now illegal.
“We’re losing a lot of consumers to non-governed tobacco available for AED 2 or AED 3, that is not health-regulated,” he added. “I have voiced that over and over to the health authorities.
“That is the key ‘cancer’ in the whole thing,” he added.
Additionally, Al Gurg said he expects that the government will unveil new regulations to combat the trade in unregulated cigarettes soon.
“They are preparing to address the issue,” he said.
On August 1, the sale and possession of cigarettes which do not bear Digital Tax Stamps officially became illegal, according to a statement from the Federal Tax Authority.
Two types of stamps have been approved, including ‘Red’, which is placed on tobacco products’ packaging at local markets and duty-free arrival lounges; and ‘Green’, which is marked on tobacco products sold at duty-free departure lounges.
The FTA has also urged consumers to check for Digital Tax Stamps on tobacco products and to inform authorities of any violations.