The Ministry of Finance and the Federal Tax Authority (FTA) have announced a major update to the UAE’s excise tax regime on sugar-sweetened beverages (SSBs), introducing a new tiered volumetric tax model that links the tax rate per liter directly to the sugar content per 100ml of the product.
This shift marks a significant departure from the current flat-rate tax system, with the revised model set to take effect in early 2026 — pending the issuance of the necessary implementing legislation.
Under the new model, the higher the sugar concentration in a beverage, the higher the applicable excise tax per liter. The policy aims to create financial incentives for manufacturers to reduce sugar content, while empowering consumers to make healthier dietary choices.
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Supporting public health through tax reform
The amendment forms part of the UAE’s broader strategy to enhance public health, reduce the consumption of high-sugar products, and encourage healthier lifestyles. Developed in close collaboration with the Ministry of Health and Prevention, the new tax model is designed to align with national health priorities and deliver measurable improvements in dietary patterns across the population.
By moving away from a classification-based tax system and toward a sugar-content-based model, the UAE aims to create a more precise and health-oriented taxation framework. The approach also reflects the country’s commitment to adopting flexible fiscal and legislative tools in support of sustainable development goals.
Ample transition time and stakeholder engagement
Authorities have emphasized their proactive approach in announcing the reform well in advance, allowing suppliers, importers, and manufacturers sufficient time to adapt. Businesses are expected to update internal systems, evaluate and potentially reformulate products, and ensure alignment of their records with the FTA’s updated requirements.
In preparation for implementation, the Ministry of Finance and the FTA will launch comprehensive awareness campaigns in collaboration with relevant health and regulatory bodies. These efforts will ensure that all stakeholders across the supply chain are equipped to transition smoothly and comply with the new regulations.
Strengthening regional policy integration
Beyond its health objectives, the revised tax model supports ongoing efforts to harmonize excise tax policy across the Gulf Cooperation Council (GCC) region. By leveraging taxation as a strategic policy tool, the UAE continues to reinforce its leadership in integrating fiscal innovation with long-term health and sustainability goals.
