The Ministry of Finance (MoF) and the Federal Tax Authority (FTA) have announced a significant amendment to the UAE’s excise tax on sugar-sweetened beverages (SSBs), shifting from a flat tax rate to a tiered volumetric model based on sugar content per 100ml.
This change is expected to take effect from the beginning of 2026, pending the release of official legislation.
Under the new model, the tax per litre will increase with higher sugar levels, incentivising manufacturers to reduce sugar content in their beverages and encouraging healthier consumer choices. The reform aligns with the UAE’s national health goals, part of broader efforts to combat excessive sugar intake and its health impacts.
This strategic move also contributes to the harmonisation of Gulf tax policies and leverages excise taxation as a tool to support sustainable development and public health priorities.
Key points:
- Current system: Flat-rate excise tax based on product classification.
- New system: Tax directly tied to sugar concentration per 100ml, meaning higher taxes for higher-sugar beverages.
- Implementation timeline: Set for early 2026, with detailed legislation to follow.
- Purpose: Promote reduced sugar consumption, support health goals, and encourage product reformulation.
- Preparation time: Businesses are being given ample time to update records, systems, and formulations.
- Collaboration: Developed with the Ministry of Health and Prevention to align with national health priorities.
The MoF and FTA will roll out awareness campaigns and provide guidance to businesses to ensure a smooth transition. Stakeholders, including suppliers and importers, are encouraged to begin preparing for compliance.
News Source: Emirates News Agency
