UAE to change tax rule on sugar-based drinks

The new model aims to incentivise manufacturers to reduce sugar levels in their products

Last updated: July 18, 2025 | 12:07

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The new model aims to incentivise manufacturers to reduce sugar levels in their products, encouraging healthier dietary choices among consumers.

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The UAE Ministry of Finance and the Federal Tax Authority are changing the way sugar-sweetened beverages will be taxed in the UAE.

Starting 2026, the excise tax imposed on sugar-sweetened beverages (SSBs) will be linked to the sugar content in the product, replacing the previously applied fixed percentage-based rate.

The introduction of a tiered volumetric model links the tax value on each litre of a sugar sweetened beverage to its sugar content per 100ml. The higher the sugar content per 100ml, the higher the tax per litre.

The new model aims to incentivise manufacturers to reduce sugar levels in their products, encouraging healthier dietary choices among consumers.

The early announcement of this policy provides suppliers, importers, and other relevant stakeholders with sufficient time to adapt their systems, review product formulations, and prepare for implementation, which will take effect at the beginning of 2026.

Awareness campaigns will be launched to ensure smooth and comprehensive understanding of the new mechanism.

“Businesses across the UAE will be granted sufficient time to prepare for the updated mechanism,” a statement said.

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