UAE to Introduce new sugar drink tax from January 2026

The United Arab Emirates will implement a new excise tax system for sugar-sweetened beverages starting January 1, 2026, marking a shift from the current flat rate to a more flexible, tiered structure.

The reform aims to make the tax framework more efficient and better aligned with updated Gulf Cooperation Council (GCC) standards.

According to Gulf News, the Ministry of Finance confirmed that it has finalized legislative amendments to incorporate the revised excise policy into national law.

The new system adopts a volumetric model, under which beverages will be taxed according to their sugar content - with higher rates applied to drinks containing more sugar or sweeteners.

The ministry said the change will provide a clearer legal and regulatory foundation for excise implementation, encouraging manufacturers to lower sugar levels while giving consumers more access to healthier options.

Under the new policy, producers and importers who have already paid the existing 50% excise tax may be eligible for partial deductions if their goods remain unsold and fall into a lower tax bracket once the new model takes effect.

Officials noted that the move is part of the UAE’s broader effort to modernize its tax framework in line with international best practices and GCC coordination.

It also supports national health objectives by discouraging excessive sugar consumption and reducing risks linked to obesity and diabetes.