The UAE Ministry of Finance and the Federal Tax Authority (FTA) have announced a major amendment to the excise tax framework for sugar sweetened beverages (SSBs), introducing a tiered volumetric model that will take effect in early 2026.
The new model links the tax value per liter of a beverage directly to its sugar content per 100ml, replacing the current flat-rate system. Under the revised mechanism, beverages with higher sugar content will incur higher tax rates per liter. This approach aims to discourage excessive sugar consumption, promote healthier dietary choices, and incentivize manufacturers to reduce sugar levels in their products.
The amendment to excise tax on sugary beverages is part of the UAE’s broader public health agenda and its ongoing efforts to create a more sustainable, health-conscious society. The Ministry of Finance noted that, unlike the existing tax system which is based on product classification, the new system ties the tax rate directly to the level of sugar content, and by extension, to the associated health impact.
The amendment to excise tax is being introduced proactively, allowing suppliers, importers, and stakeholders sufficient time to prepare. Businesses are expected to update internal systems, review product formulations, and align their records with the FTA’s upcoming requirements.
Implementation is scheduled for 2026, subject to the issuance of relevant legislation. The government will also launch nationwide awareness campaigns, in coordination with the Federal Tax Authority and health regulators, to ensure a smooth transition and readiness across the business ecosystem.
The new model was developed in close collaboration with the Ministry of Health and Prevention, ensuring alignment with national health objectives and delivering tangible improvements in dietary behavior and consumer well-being.
The amendment to excise tax shift supports Gulf-wide tax policy integration and highlights the strategic use of taxation as a tool to achieve the UAE’s sustainable development goals. Businesses will be given ample time to adapt, and further technical details will be shared in the coming period to support full compliance.
By tying tax rates directly to sugar content, the UAE is taking a decisive step toward improving public health outcomes while encouraging responsible production and consumption patterns.
