UAE Ministry Of Finance And FTA Introduce Tiered Excise Tax On Sugar Sweetened Beverages For Health Promotion

The Ministry of Finance and the Federal Tax Authority (FTA) have introduced a new excise tax model for sugar-sweetened beverages (SSBs) in the UAE. This model links the tax on each litre of these drinks to their sugar content per 100ml. The higher the sugar content, the greater the tax, replacing the previous flat rate system.

This change is part of a broader initiative to improve public health by reducing high-sugar product consumption. It aims to encourage beverage manufacturers to lower sugar levels in their products. The Ministry of Finance highlighted that this model reflects the UAE's commitment to using flexible financial tools to promote healthier lifestyles.

The updated mechanism will take effect at the start of 2026, pending necessary legislation. Businesses will have ample time to adjust, including updating systems and reviewing product formulations. The Ministry plans comprehensive awareness campaigns with relevant entities to ensure smooth implementation.

Developed with the Ministry of Health and Prevention, this system aligns with national health objectives. It aims to deliver measurable improvements in dietary habits. By linking taxes directly to sugar content, it incentivises manufacturers to reduce sugar levels and empowers consumers to make informed choices.

This initiative also supports Gulf-wide tax policy integration and uses taxation strategically for sustainable development goals. Businesses will receive further details soon to help them comply fully with the new policy.

The proactive approach ensures suppliers, importers, and stakeholders have enough time for preparation. This includes aligning records with FTA requirements and ensuring readiness for the enhanced model's implementation once legislation is issued.

The Ministry confirmed that this shift from product classification-based taxation ties tax rates directly to health impacts associated with sugar content levels. This strategic move aims not only at improving public health but also at fostering regional cooperation in tax policies across the Gulf region.

In summary, this amendment marks a significant step towards promoting healthier consumption patterns in the UAE through strategic use of taxation as a tool for sustainable development and public health improvement.

With inputs from WAM