UAE to implement sugar-linked volumetric tax on beverages from 2026 to curb consumption

UAE – The United Arab Emirates (UAE) is preparing to implement a new volumetric excise tax system on sugary beverages, with rates directly linked to sugar concentration levels.  

Scheduled to take effect in early 2026, the revised model is designed to promote healthier dietary choices and reduce the consumption of high-sugar drinks. 

Unlike the current flat-rate tax system based on product classification, the upcoming tiered model will calculate tax per litre according to the amount of sugar per 100ml. The higher the sugar content, the higher the tax applied.  

This shift is intended to create financial incentives for beverage producers to lower sugar content and enable consumers to make more informed decisions. 

According to the UAE Ministry of Finance, the initiative aligns with the nation’s broader commitment to using adaptive financial and legislative frameworks to advance public health.  

The policy also supports long-term Gulf Cooperation Council (GCC) goals for harmonising regional tax strategies and integrating health-focused fiscal policies. 

The system was developed in close collaboration with the Ministry of Health and Prevention to ensure that it aligns with national health targets. Authorities expect it to contribute to measurable improvements in dietary consumption and overall population health. 

To support the transition, the Federal Tax Authority (FTA) has confirmed that awareness campaigns will be launched jointly with relevant health and regulatory agencies. These campaigns will inform manufacturers, importers, and other stakeholders about the new tax structure and its implications. 

The FTA stated that this early announcement provides businesses with sufficient time to adjust production lines and reformulate products to meet the upcoming tax criteria. Industry stakeholders will have over a year to prepare for the system’s introduction. 

Additional technical details and implementation guidelines will be issued ahead of the rollout to ensure full industry compliance. These guidelines are expected to cover tax rate brackets, sugar measurement procedures, and reporting requirements. 

The UAE’s planned introduction of the sugar-based excise tax further reinforces its strategy of leveraging fiscal tools to support sustainable development goals.  

By targeting sugar content directly, the initiative aims to drive reform in beverage production and consumption habits while supporting healthier lifestyles across the population. 

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