Abu Dhabi: The UAE Ministry of Finance and the Federal Tax Authority (FTA) have announced that the country will implement a revised excise tax structure targeting sugar-sweetened beverages (SSBs) starting in 2026.
The updated policy will replace the current flat-rate tax model with a new volumetric, tiered system that directly links the amount of tax imposed per liter to the sugar content of each drink. Beverages with higher sugar concentrations per 100ml will face higher tax rates, incentivizing manufacturers to reformulate products with less sugar to reduce costs for both producers and consumers.
The Ministry of Finance explained that this move is part of the UAE’s broader strategy to enhance public health by reducing excessive sugar consumption, which is a major contributor to obesity and chronic diseases such as diabetes. The updated tax also aligns with the UAE’s commitment to adopting dynamic fiscal and legislative tools that encourage healthy lifestyle choices.
The government has coordinated closely with the Ministry of Health and Prevention to ensure the new tax supports the country’s long-term health goals. Businesses, suppliers, and importers will have sufficient time to prepare for the shift by reviewing product ingredients, updating systems, and aligning processes with the new tax requirements.
To ensure a smooth transition, comprehensive awareness campaigns and guidance materials will be launched ahead of the 2026 rollout. These initiatives will help stakeholders understand the new structure, adjust product formulations if needed, and comply with Federal Tax Authority standards.
The sugar-based beverage tax aligns with the UAE’s efforts to harmonize excise tax policies across the Gulf region and strengthen the role of taxation as a tool for supporting sustainable development and healthier communities.
Further details about the implementation and technical requirements of the new sugar tax will be shared by the Ministry of Finance and the FTA in the coming months.
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