Excise tax was introduced across the country on October 1 in a bid to diversify the Government’s revenue streams and discourage the consumption of products that harmed the environment and public health. One week after the ‘sin tax’ took effect, The National visited tobacconists and supermarkets to assess the effects the federal tax has had on consumers and trade.
Young people in Sharjah claim doubling the price of some fizzy drinks will do little to deter their everyday sugar consumption.
Teenagers asked how the new ‘sin tax’ will affect their habits said they will continue to swig the unhealthy drinks, regardless of new higher prices.
Omran Khalid, a 12-year-old Jordanian, regularly consumes soft drinks and will continue despite the higher costs.
“I usually gather with my friends after school and we enjoy drinking soft drinks,” he said.
“I don’t think the double cost will reduce my consumption, and my family serve diet Pepsi with lunch almost every day.”
Mountain Dew is another popular drink with youngsters, with part of the attraction being that it’s loaded with 55mg of caffeine per 12 fluid ounce can.
Few youngsters seemed concerned with the rising costs of soft drinks as part of the government crackdown on unhealthy living.
“My favourite drink is Mountain Dew, but I used to buy it for only Dh1 almost six years ago,” said Abduallah Yahya, 14, a Syrian who attends a private school in Sharjah.
“I wonder when I turn twenty, how much soft drinks will cost. This won’t affect my soft drinking habits, as my family purchased a huge quantity of soft drinks before October 1.”
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Older expatriates said they were more likely to consider cutting back on cigarettes and soft drinks as the squeeze on cost of living continues.
Some lower paid workers have said they may be forced to consider leaving the UAE if the cost of living continues to rise, with VAT also due to be introduced shortly.
“My family is affected by the price hike and I expect prices of other products to increase, as well,” said Ummay Hani, an Indian expat, 28, who has a four-year-old child.
“It will be soon impossible to afford living here with all these price changes.
“My son drinks a lot of soft drinks, such as Coke and Pepsi. After the prices became so high, I will not allow him to drink them anymore.”
As the prices went up, shopkeepers faced a new challenge of explaining to regular customers why the cost of their regular smokes had doubled overnight, and why drinks were also now almost twice the price.
Moner Khan, a Pakistani shopkeeper at a supermarket in Al Khan area in Sharjah, said some of his customers were arguing with him and refused to accept the new rates.
“Many of my customers were arguing about the prices of cigarettes, but I explained it was happening everywhere," he said.
“They think I am the only shop that increased tobacco products prices. I tried to explain to them the tobacco and sugar-laden drinks’ prices have doubled and that it is not my decision.”
Other small businesses had seen a noticeable drop off in sales since the tax was introduced.
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“My customers have been purchasing soft drinks and cigarettes on a daily basis, but some of them have stopped buying them altogether this week,” said Sayed Noor, a Pakistani shopkeeper in Al Qasimyah, Sharjah.
“There were regular customers who came every morning to buy their usual cigarettes, some are now buying a pack of cigarettes every two days so maybe they are cutting back.”
Ali Shaker, a dad-of-two from Sudan, is also worried about the overall cost of living.
“Everything is becoming more expensive, even electricity bills, but our salaries are the same,” he said.
“The costs of everything has increased. It is not only limited to tobacco products and cigarettes.”
“We’re now paying Dh2.15 for a can of Pepsi from a supermarket, but we will have to pay much more in restaurants. I am planning to quit soft drinks, but let’s see what happens.”