Shoppers to pay more for imported goods as Dubai lowers tax threshold

Dubai Customs says goods worth more than Dh300 will be taxed, cutting the exemption from Dh1,000

UAE and Gulf-based online retailers are expected to benefit, as consumers will pay more to import goods from abroad. Pradeep Gaur / Mint via Getty Images

Shoppers importing goods into Dubai from outside the Gulf will pay tax on more items after authorities lowered the exemption threshold.

Any goods worth more than Dh300 will now be taxed at 5 per cent.

Before January 1, the threshold was Dh1,000 ($272).

Dubai Customs set out the decision on its website. Ship & Shop, Aramex and other courier companies informed customers of the decision by text message this week.

The move is widely expected to benefit local and home-grown online retailers, giving them a competitive edge.

The charge is in addition to 5 per cent VAT on goods imported into the Gulf.

This breakdown does not apply to tobacco, tobacco products, e-cigarettes and nicotine liquids, which are taxed separately under a December 2019 decision.

Since December 2019, the UAE government has expanded the list of excise taxable products in an effort to improve public health and reduce consumption of unhealthy goods.

E-cigarettes, vaping devices and tobacco refills are subject to a 100 per cent tax, while juices and drinks containing added sugar and sweeteners are subject to a 50 per cent tax.