The UAE’s Ministry of Finance and the Federal Tax Authority (FTA) have unveiled significant changes to the excise tax system that applies to sugar-sweetened beverages (SSBs). A new tiered volumetric framework will now correlate the tax amount per litre to the sugar content in the beverage.
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According to the new system, the tax rate increases with the sugar content per 100ml. This represents a shift from the existing uniform tax structure, which imposes the same tax on all SSBs, regardless of their sugar content, as reported by WAM.
Part of a larger health and sustainability initiative
This initiative is in line with the UAE’s extensive public health objectives aimed at curtailing sugar intake, promoting healthier lifestyles, and motivating manufacturers to reduce sugar levels in their products.
The updated tax model is projected to be implemented at the start of 2026, subject to the necessary legislative enactments. Authorities have stated that the advance notice is meant to give suppliers, importers, and other relevant parties ample time to get ready. Businesses are encouraged to modify their internal systems, reassess product formulations, and ensure their tax documentation is compliant with the new regulations.
The Ministry of Finance indicated that this improved model demonstrates the UAE’s dedication to innovative financial and legislative measures that bolster national health objectives. Unlike the previous classification-based tax regime, the new approach directly links tax obligations to sugar content, thereby connecting fiscal policies to health impacts.
“This revised mechanism motivates manufacturers to minimize added sugars and enables consumers to make more informed food choices,” stated the Ministry in an announcement.
The tax policy also supports regional efforts to standardize tax frameworks within the Gulf region and promotes the use of taxation as a tool for sustainable development.
Implementation planned for 2026 with industry support strategies
To facilitate a seamless implementation, the Ministry of Finance, along with the Federal Tax Authority and other associated bodies, will initiate public awareness campaigns in the upcoming months. These initiatives will aim to educate stakeholders and ensure comprehensive compliance within the business sector prior to the 2026 rollout.
This system has been crafted in close collaboration with the Ministry of Health and Prevention to guarantee alignment with the national public health agenda and necessary enhancements in dietary practices.
Additional information, including specific tax rates and implementation protocols, will be provided in due course to assist businesses during the transition phase.