UAE Sugar Drink Tax January 2026 | Excise Tax System Based

The UAE Ministry of Finance has confirmed that updated excise tax rules on sugar-sweetened beverages (SSBs) will come into effect from January 1, 2026. This change will replace the current flat 50% tax with a tiered volumetric model aligned with Gulf Cooperation Council (GCC) standards, where tax rates depend on a drink’s actual sugar or sweetener content.

Under the new system, beverages with higher sugar concentrations will be taxed at higher rates, while those with lower sugar content will benefit from lower tax rates. This approach incentivizes beverage manufacturers to reduce sugar levels and encourages healthier consumer choices. Drinks containing only artificial sweeteners will be exempt from excise tax.

The amendments provide a clear legal framework supporting smooth implementation and include provisions allowing importers and producers who paid the old 50% tax before January 2026 to deduct excess payments if the new tax rate is lower and products remain unsold.

The Ministry sees these reforms as part of the UAE’s commitment to modernizing its tax system, fostering economic stability, and advancing public health goals by reducing sugar consumption linked to obesity, diabetes, and other chronic diseases.

This tiered sugar tax is expected to promote product reformulation, increase transparency, and align the UAE with global health policies while supporting a sustainable fiscal environment.