January 3, 2025 – The Ministry of Finance has issued Ministerial Decision No. (1) of 2025, which implements provisions of Cabinet Decision No. 52 of 2019. This decision introduces updates for businesses dealing with excise goods, excise tax rates, and excise price calculations. 

Key Highlights 

1.Excise Tax on Liquids for E-Cigarettes 

Excise tax applies to liquids used in electronic smoking devices—whether or not they contain nicotine. These products must be classified using the Harmonized System Codes specified under Chapter Twenty Four of the GCC’s Common Schedule. 
Example: Vape liquid retailers need to ensure compliance with these codes when importing or selling. 

2.Excise Tax on Electronic Smoking Devices

Electronic smoking devices, whether they contain nicotine or tobacco, fall under excise tax regulations. Below are the Harmonized System Codes for specific products: 

  • 85 43 40 10 00 00 – Reusable electronic cigarette devices. 
  • 85 43 40 20 00 00 – Electronic water pipe (shisha). 
  • 85 43 40 30 00 00 – Electrically heated devices for cigarettes. 
  • 85 43 90 91 00 00 – Accessories for electronic cigarettes (excluding batteries). 

 

3. Excise Price for Concentrates, Powders, and Mixable Products 

Awaiting Official Changes 

For products like drink concentrates, powders, gels, or extracts that can be transformed into beverages, the excise price is calculated based on the higher of:  

  • The standard price published by the authorities. 
  • The “designated selling price” declared by the importer/producer (before discounts). 

4. Repeal of Previous Regulations

The new decision repeals Ministerial Decision No. 236 of 2019 and any provisions that conflict with the updated framework. 

What This Means for Your Business 

These updates are significant for businesses dealing with electronic smoking devices or taxable beverages. Understanding the harmonized codes and proper pricing methods is essential to avoid penalties and ensure compliance. 

How Can Businesses Prepare? 

  • Review the harmonized codes and ensure your products are classified correctly. 
  • Maintain thorough documentation of selling prices and deductions for taxable goods. 
  • Stay updated with excise regulations to avoid disruptions in operations. 
Let’s Discuss!

Are you confident that your business is compliant with these new excise tax updates? Let us know in the comments! If you have questions about navigating these changes, feel free to message us or drop a comment below.