Announced on 11 December 2025, the UAE’s new Cabinet decision introduces a tiered excise tax on sweetened beverages from January 2026, linking tax rates to sugar content to promote public health.
The Ministry of Finance, in a press release issued on 11 December 2025, announced the issuance of Cabinet Decision No. (197) of 2025, introducing updated regulations on selective goods, applicable tax rates, and the methodology for calculating excise prices. The decision includes amendments to the excise tax framework, notably the adoption of a tiered volumetric model for sweetened beverages.
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Under the new resolution, Cabinet Resolution No. (52) of 2019 on excise goods and its subsequent amendments will be repealed. The changes align with recent amendments to Federal Decree-Law No. (7) of 2025 on Excise Tax and form part of the UAE’s ongoing efforts to promote public health and encourage healthier consumption habits across the community.
The revised framework seeks to establish a unified and transparent legislative structure that clearly defines excise goods and their applicable tax rates and values, enabling taxable persons to better understand, comply with, and meet their tax obligations.
As part of the new tax calculation mechanism, sweetened beverages will be taxed based on sugar content per 100 millilitres. Drinks containing between 5 grams and less than 8 grams of sugar per 100 millilitres will be subject to a tax of AED 0.79 per litre, while beverages with 8 grams or more will be taxed at AED 1.09 per litre. Products with less than 5 grams of sugar per 100 millilitres, as well as those containing only artificial sweeteners, will be exempt from excise tax.
The decision also outlines the Federal Tax Authority’s procedures for classifying products, including their inclusion in the official price list. Where taxable persons fail to submit required laboratory reports or supporting documentation, the tax will be applied according to the highest sugar category, with adjustments permitted upon submission of approved reports.
All amendments related to the tiered volumetric model will take effect on 1 January 2026. The Ministry of Finance stated that the measures support national public health goals, help reduce the long-term financial burden of sugar-related diseases, and provide a clear and consistent excise tax framework that supports both consumers and investors.
