UAE to implement tiered sugar tax on sweetened beverages starting January 2026
The UAE’s new sugar tax will replace the flat-rate system with a tiered model based on sugar content per 100ml.
UAE – The United Arab Emirates (UAE) has announced that a new tiered sugar tax on sweetened beverages will take effect on January 1, 2026.
The measure, confirmed by the UAE Ministry of Finance, will replace the current 50 percent flat-rate excise tax on sugar-sweetened beverages sold across the Emirates.
Under the revised system, tax rates will vary depending on the sugar concentration in beverages, with higher-sugar products attracting higher taxes. Energy drinks will remain subject to a 100 percent excise tax, consistent with the existing framework.
The government has also outlined a transition mechanism for taxable persons, including importers and manufacturers, who have already paid a 50 percent excise tax prior to the amendments taking effect. This aims to ensure a smooth adjustment to the new structure.
The proposed sugar tax, first announced in July 2025, seeks to encourage beverage manufacturers to lower sugar levels in their products and promote healthier consumer choices.
According to the ministry, the legislation aligns with the Gulf Cooperation Council’s (GCC) collective adoption of a tiered volumetric model for excise taxes on sugar-sweetened beverages.
Other GCC member states, including Saudi Arabia, Qatar, and Bahrain, currently impose a 50 percent tax on sweetened and carbonated drinks and a 100 percent levy on energy drinks.
Oman enforces a similar 50 percent tax and recently introduced digital tax stamps for beverages under excise regulation.
Kuwait remains the only GCC country without excise taxes on carbonated, sugar-sweetened, or energy beverages.
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