UAE Ministry Of Finance Introduces New Excise Tax Amendments For Sweetened Beverages

The Ministry of Finance has introduced Cabinet Decision No. (197) of 2025, which revises the excise tax on selective goods. This decision aims to implement a "tiered volumetric model" for sweetened beverages. The new regulation will replace Cabinet Resolution No. (52) of 2019, along with its amendments, to align with the UAE's efforts to promote healthier consumption habits.

The revised excise tax system introduces a tiered approach based on sugar content in beverages. Drinks with 5 to less than 8 grams of sugar per 100 milliliters will incur a tax of AED0.79 per liter. Beverages containing 8 grams or more of sugar per 100 milliliters will be taxed at AED1.09 per liter.

This amendment is part of the UAE's strategy to establish a unified legislative framework for excise goods and their tax rates. It aims to simplify compliance for taxable persons by clearly defining excise goods and their applicable taxes, thus facilitating better understanding and adherence to obligations.

Beverages with less than 5 grams of sugar per 100 milliliters and those using only artificial sweeteners are exempt from this taxation. The Ministry emphasises that these changes support public health initiatives by reducing diseases linked to high sugar intake while providing a clear framework for both consumers and investors.

The Federal Tax Authority will oversee product classification procedures, including adding products to the official price list. If taxable persons fail to submit necessary laboratory reports or documentation, taxes will be applied based on the highest sugar content category until an approved report is provided.

All changes related to the tiered volumetric model will be effective from January 1, 2026, for all taxable individuals. The Ministry highlights that these amendments reflect the government's dedication to enhancing public health and mitigating financial burdens from diseases associated with excessive sugar consumption.

With inputs from WAM