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The UAE Ministry of Finance (MoF) has completed a set of proposed legislative amendments to embed its updated excise tax policy on sugar-sweetened beverages (SSBs) into national law. The reforms align with the Gulf Cooperation Council’s (GCC) adoption of a tiered volumetric model, aimed at creating a unified and health-focused taxation system across member states.
The revised policy is scheduled to come into effect on January 1, 2026, according to a report by the Emirates News Agency (WAM).
Read more-UAE’s new tax on sugary drinks: What it means for you, businesses
The proposed amendments aim to create a robust legal and regulatory infrastructure to ensure smooth nationwide implementation. The MoF stated that the framework was designed to support a competitive and adaptable tax environment, taking into account practical challenges that businesses may face during the transition period.
The changes reflect a broader strategy to modernise the tax system through proactive governance and ensure alignment with the UAE’s public health and fiscal objectives.
Clear deduction mechanism for previously taxed goods
A major feature of the amendments is the tiered taxation structure based on sugar content or other sweeteners. This model introduces varying excise rates depending on the beverage’s composition, replacing the flat 50 per cent tax rate previously applied.
The amendments also provide clarity for businesses with inventory taxed under the previous regime. Taxable entities that imported or produced goods before the new rules take effect, and whose tax liability has decreased as a result, will be eligible to partially reclaim the difference, provided those goods remain unsold.
The MoF reaffirmed that these changes are part of the UAE’s commitment to fiscal sustainability, enhanced tax transparency, and long-term public health improvements, underlining a forward-looking approach to policy reform.
