The UAE will roll out a new tiered sugar drink tax in January 2026, aligning with GCC regulations and public health sustainability goals.
ABU DHABI: Starting 1 January 2026, the UAE will replace its current flat-rate excise duty on sugary drinks with a tiered sugar drink tax system. The change, announced by the Ministry of Finance, aligns with the Gulf Cooperation Council (GCC)’s updated tax framework aimed at improving public health and promoting regulatory efficiency.
Under the revised system, beverages will be taxed based on their sugar content rather than a fixed percentage. The move follows the GCC’s adoption of a volumetric model, meaning the more sugar a beverage contains, the higher the tax levied. The Ministry said this model better reflects international best practices and encourages healthier consumption patterns.
In a statement, the Ministry explained that the new rules aim to “establish a comprehensive legal and regulatory foundation” for smooth implementation across the UAE. Additionally, manufacturers and importers who have already paid excise tax on goods before the new rules come into effect—but whose tax liabilities are reduced under the updated model—will be eligible to partially recover their earlier tax payments, provided the goods remain unsold.
The initiative also seeks to build a “competitive tax environment,” strengthening transparency and trust between the government and businesses. It forms part of broader efforts to improve fiscal sustainability, public health outcomes, and alignment with GCC and global economic standards.
The Ministry noted that the transition to a tiered sugar drink tax is part of its commitment to adopting a proactive, flexible approach to policymaking. It reflects a balance between economic development, consumer protection, and long-term health policy.
Consumers and businesses are expected to receive full guidance ahead of the January 2026 rollout, including classifications and thresholds based on sugar content.
