Picture for illustrative purposes only. ARCHIVE

The UAE will implement a new excise tax system on sugar-sweetened beverages beginning January 2026, linking the tax directly to the sugar content of each product, the Ministry of Finance and the Federal Tax Authority announced. This tiered model will replace the current flat tax and is aimed at encouraging manufacturers to reduce sugar levels while allowing consumers to make healthier choices. “The higher the sugar content per 100ml, the higher the tax per litre,” the ministry stated, emphasizing the country’s strategy to align fiscal policy with public health goals. The new model reflects the UAE’s commitment to combat non-communicable diseases through regulatory tools. Developed in coordination with the Ministry of Health and Prevention, it is designed to reduce consumption of high-sugar beverages and improve overall dietary patterns.

What will change for consumers?

Currently, sweetened drinks are taxed at a flat 50 percent rate, regardless of how much sugar they contain. For example, a standard can of cola (330ml) costs about Dh3.50, up from Dh1.50 prior to the introduction of excise tax in 2017. Under the revised model, taxes will be calculated based on sugar content per 100ml. This means that drinks with higher sugar content could see higher prices than the current 50 percent rate; while drinks with lower sugar content may become more affordable, incentivizing healthier choices. The new system will be part of a broader public awareness campaign and will allow businesses time to adjust before it is enforced. The Ministry of Finance confirmed that implementing legislation and detailed guidelines will be issued ahead of the effective date, alongside training and awareness drives for importers, retailers, and manufacturers. ICA/Expat Media
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