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How new system works
The new tiered model means drinks with more sugar will face higher taxes, while those with less sugar will be taxed at lower rates. This method aims to encourage drink makers to reduce sugar levels in their products and give consumers more options to choose healthier drinks.
The Ministry said the amendments also include a rule for importers and producers who have already paid the current 50% excise tax on goods before the new system starts. If their tax rate is lower under the new model and the goods have not been sold, they can deduct part of the previously paid tax.
Why the UAE updating policy
The Ministry explained that the changes are part of efforts to keep the UAE’s tax system in line with global best practices and GCC regulations. The goal is to make the system fair, flexible, and easier to manage for both businesses and government authorities.
It also reflects the UAE’s commitment to improving public health. By linking tax rates to sugar levels, the new system aims to reduce sugar consumption and support the country’s broader health and wellness goals, including lowering obesity and diabetes risks.
Supporting modern tax system
The Ministry said the proposed changes will strengthen trust in the UAE’s financial system and support a stable and sustainable economy. Businesses will have time to adjust before the new rules come into effect at the start of 2026.
The Ministry added that the amendments are part of its ongoing work to modernize the tax framework, ensuring it stays up to date, efficient, and supportive of the UAE’s long-term fiscal and social objectives.
Justin is a personal finance author and seasoned business journalist with over a decade of experience. He makes it his mission to break down complex financial topics and make them clear, relatable, and relevant—helping everyday readers navigate today’s economy with confidence.
Before returning to his Middle Eastern roots, where he was born and raised, Justin worked as a Business Correspondent at Reuters, reporting on equities and economic trends across both the Middle East and Asia-Pacific regions.
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