UAE's Sugary Beverage Tax Overhaul Unveiled

New Excise Tax on Sugary Drinks in UAE by 2026: Changes Ahead

From January 1, 2026, the authorities of the United Arab Emirates will introduce a new excise taxation model for the category of sweetened drinks, which will bring significant changes for beverage manufacturers, importers, and distributors. The aim of the new system is to encourage healthier consumption habits, reduce public health expenditures, and curtail unhealthy products. According to the announcement by the Federal Tax Authority (FTA) based in Dubai, the new tax rates will be applied based on a so-called "multi-tiered, volume-based model."

What Will Change from January 1, 2026?

In the new system, the excise tax on sweetened drinks will be aligned with the product's total sugar and sweetener content, calculated per 100 ml. This means the more sugar or sweetener a drink contains, the higher the tax rate payable on it will be. The new regulations will apply to ready-to-drink beverages, concentrates, powders, jellies, extracts, and any products that can be made into sweetened beverages.

The FTA specifically emphasized that only those beverages that contain only natural sugar and no additional sweeteners or artificial components will be exempt from the excise tax.

Four Categories in Taxation

The classification of drinks will be based on four categories according to sugar content, which will be introduced with the following tax rates:

1. High sugar content sweetened drinks: These are drinks that contain at least 8 grams of sugar or another sweetener per 100 ml. A tax of 1.09 dirhams per liter will be levied on these.

2. Medium sugar content sweetened drinks: Those that contain at least 5 grams but less than 8 grams of sugar or other sweetener per 100 ml. A tax of 0.79 dirhams per liter will be charged for these.

3. Low sugar content sweetened drinks: Drinks containing less than 5 grams of sugar and/or sweetener per 100 ml. These will be exempt from the tax, meaning 0 dirhams/liter.

4. Artificially sweetened drinks: Containing only artificial sweeteners, or a mix of artificial and natural sugars, but the total quantity does not exceed 5 grams per 100 ml. These are also subject to a 0 dirhams/liter tax.

Taxation of Carbonated and Energy Drinks

Previously, carbonated drinks formed a separate category, but under the new model, they will also be taxed according to the classification as sweetened drinks, based on their sugar and sweetener content. In contrast, energy drinks will remain under the existing system, where the tax is 100 percent of the consumer price, and they will not fall under the new volume-based model.

No Marketing Without Certification

The FTA has set strict requirements for the manufacturers, importers, and storers of sweetened drinks. All relevant parties will be required to obtain the so-called “Emirates Conformity Certificate for Sugar and Sweeteners Content in Beverages,” which certifies the sugar and sweetener content of the drink.

To apply for the certificate, a laboratory test will be needed, which can only be conducted by accredited laboratories in the United Arab Emirates. After the test, the data can be submitted through the official website of the Ministry of Industry and Advanced Technology.

The certificate must then be uploaded onto the EmaraTax digital platform when registering or updating the registration of the beverage. If the certificate is not submitted, the drink will automatically be classified into the high sugar content category and taxed accordingly, regardless of its actual sugar content.

Increased Responsibility for Manufacturers

For manufacturers and importers, the new system poses a significant challenge, as they will need to pay more attention not only to the composition of the products but also to precise labeling and laboratory tests. Inadequate or incomplete data submission may lead to suspension of registration, or even halt imports.

For drink powders, concentrates, and extracts, for example, it will be mandatory to specify the quantity needed to prepare a single serving, and the product's total sugar content will be calculated based on that. The FTA aims to ensure that the regulations apply to all formats, not just ready-to-drink beverages.

A Healthier Future – Through Taxation?

The introduction of the new tax system is not merely a financial tool but part of a long-term public health strategy. The goal is to reduce the sugar consumption of UAE residents, which is a significant factor in the development of non-communicable diseases, such as type 2 diabetes, obesity, and cardiovascular diseases.

According to the authorities, the new system also serves as an incentive: manufacturers who reduce the sugar content of their products will receive tax breaks, giving them a competitive edge in the market. This could positively affect the directions of innovation in the food industry as well.

Conclusion

The new excise tax on sweetened beverages, coming into effect on January 1, 2026, introduces a stricter, more transparent, and differentiated system in the UAE. Although the regulation adds administrative burden and costs for manufacturers, the long-term goal is to shape a more health-conscious society.

Dubai-based businesses, manufacturers, and importers should start preparing now to meet the certification, laboratory testing, and digital registration obligations in time. The regulation not only transforms market operations but also impacts consumers’ choices, encouraging more conscious decisions for health’s sake.

(Source based on the announcement of UAE Federal Tax Authority (FTA).)