The UAE Ministry of Finance has proposed legislative changes to roll out an updated excise tax on sugar-sweetened beverages starting January 1, 2026, replacing the current flat-rate model with a tiered system based on sugar content.
In a statement, the Ministry said the move is part of efforts to strengthen the efficiency of the tax system and align it with global best practices and unified Gulf Cooperation Council (GCC) directives.
The move follows the GCC’s adoption of a tiered volumetric model for taxing sugar-sweetened beverages, under which different levels of tax are applied depending on sugar content or other sweeteners. The new system is scheduled to take effect on 1 January 2026.
According to the Ministry, the changes aim to “establish a comprehensive legal and regulatory foundation that ensures the smooth implementation of the updated policy at the national level.”
The statement also said the amendments include “a clear mechanism that enables taxable persons who have imported or produced goods subject to a 50 per cent excise tax prior to the amendments coming into effect, and whose tax liability decreased as a result of these amendments (before selling the goods for which tax was previously paid), to deduct part of the previously paid tax.”
The Ministry added that the updated framework is intended to foster “a competitive tax environment” and reflects the UAE’s “commitment to updating its financial system through a flexible and proactive approach that supports economic stability, strengthens trust with taxpayers, and contributes to achieving the country’s fiscal and public health sustainability objectives.”
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