United Arab Emirates Plans to Implement a Sugar-Based Graduated Tax on Sugary Drinks by 2026
**UAE Announces New Tiered Volumetric Excise Tax on Sugar-Sweetened Beverages**
The United Arab Emirates (UAE) has announced a significant change to its excise tax on sugar-sweetened beverages (SSBs), moving from a flat 50% tax rate to a tiered, sugar-based volumetric tax system starting January 2026. The new approach is designed to incentivize both manufacturers and consumers towards lower-sugar options, and aims to reduce sugar consumption, combat obesity and Type 2 diabetes, and promote public health.
The key features of the new system include a tax rate calculation that is based on a sliding scale determined by grams of sugar per 100ml, with beverages containing higher sugar content attracting a higher tax. The reform is being carried out with the aim of supporting public health priorities and aligning with the UAE's commitment to health and sustainable development.
While the specific numerical tax rates per litre for each sugar-content tier have not been publicly disclosed yet, the Ministry of Finance and Federal Tax Authority have confirmed that the tax will increase with sugar content. Businesses and consumers should watch for official announcements from the Federal Tax Authority as the 2026 implementation date approaches.
Until end-2025, all SSBs (carbonated, energy, and other sweetened drinks) are taxed at a flat 50% rate. Under the new model, the tax per litre will vary based on sugar content per 100ml; exact rates per litre are yet to be announced.
The reform also aims to support the harmonisation of Gulf tax policies and aligns with the UAE's national health goals. It is being developed in collaboration with the Ministry of Health and Prevention to align with national health priorities. Stakeholders, including suppliers and importers, are encouraged to begin preparing for compliance with the new system.
The change contributes to the UAE's broader efforts to combat excessive sugar intake and its health impacts. The new system will be a tax directly tied to sugar concentration per 100ml, meaning higher taxes for higher-sugar beverages. The Ministry of Finance and Federal Tax Authority will roll out awareness campaigns and provide guidance to businesses to ensure a smooth transition. The new model will take effect from the beginning of 2026, pending official legislation.
In conclusion, the UAE’s upcoming excise tax on sugar-sweetened beverages will be volumetric and tiered by sugar content per 100ml, replacing the current flat 50% rate. The government has not yet released the specific tax rates per litre for each sugar-content tier, but businesses and consumers should prepare for the change, which aims to incentivize manufacturers to reduce sugar content in their beverages and promote reduced sugar consumption, support health goals, and encourage product reformulation.
- The United Arab Emirates (UAE) considered the UAE's commitment to health, sustainable development, and combat obesity and Type 2 diabetes when announcing a change in its excise tax on sugar-sweetened beverages (SSBs), shifting from a flat 50% tax rate to a tiered, sugar-based volumetric tax system starting January 2026.
- To incentivize both manufacturers and consumers towards lower-sugar options, the new system is designed with a tax rate calculation that employs a sliding scale determined by grams of sugar per 100ml, with higher-sugar content beverages attracting a higher tax.
- The reform supports the harmonization of Gulf tax policies and aligns with the UAE's national health goals; it is a collaborative effort between the Ministry of Finance, Federal Tax Authority, and Ministry of Health and Prevention.
- As the 2026 implementation date approaches, businesses and consumers should be watchful for official announcements from the Federal Tax Authority regarding the specific numerical tax rates per litre for each sugar-content tier.
- The health and fitness industry, particularly nutritional science and fitness-and-exercise professionals, could collaborate with businesses to advocate for healthier options and assist in product reformulation efforts in light of the UAE's upcoming excise tax.
