The UAE Ministry of Finance announced that updated excise tax rules on sugar-sweetened beverages (SSBs) will take legal effect on January 1, 2026, aligning the country’s tax framework with new standards set by the Gulf Cooperation Council (GCC).
According to the ministry, the legislative amendments have been completed to formally integrate the updated excise tax policy into national law. The move supports the GCC’s adoption of a tiered volumetric model for taxing sugary drinks replacing the UAE’s current flat 50% excise tax.
Under the new system, tax rates will vary depending on a drink’s sugar or sweetener content. Beverages with higher sugar levels will face higher taxes, while those with lower sugar content will be taxed less.
Officials said the approach is designed to encourage manufacturers to reduce sugar in their products and provide consumers with healthier options.
The ministry also noted that importers and producers who have already paid the existing 50% tax before the new system takes effect may deduct part of the previously paid tax if their goods remain unsold and qualify for a lower rate under the new model.
The reforms aim to ensure a more efficient, transparent, and flexible tax system that aligns with international best practices and GCC standards.
Beyond fiscal objectives, the ministry emphasized that the changes also reflect the UAE’s commitment to public health, by promoting reduced sugar consumption and supporting national wellness goals such as lowering obesity and diabetes risks.
