New UAE Sugar Tax : How Tiered System Will Impact Your Drinks

In one of the GCC-wide actions to decrease the number of sugary drinks and encourage healthy living, the United Arab Emirates will introduce a new sugar tax starting January 1, 2026.

Changes to Excise Tax

Previously, all soft drinks were subject to a flat 50% excise tax since 2019. The updated system will adopt a tiered model, taxing beverages based on their sugar content and artificial sweeteners. Prices of soft drinks are expected to vary depending on sugar levels in each product.

The new tier classifications are as follows:

High-sugar drinks: 8g or more sugar per 100ml

Moderate-sugar drinks: 5g–7.9g per 100ml

Low-sugar drinks: Less than 5g per 100ml

Artificially sweetened drinks: Specific tax rates applied

Energy drinks remain outside the new tiered system, continuing with a 100% excise tax.

Implementation Rules

The Ministry of Finance announced the legislation in October 2025 to ensure a smooth transition from the flat-rate system. Drinks imported or produced under the previous 50% excise tax can have partial deductions if the new rate is lower and the products remain unsold.

The calculation of excise will include all added sugars and sweeteners such as honey, and non-alcoholic drinks that have only natural sugars will not be subject to tax.

Health and Financial Objectives.

According to the UAE Ministry of Finance, tiered sugar tax helps to achieve the national sustainability goals in the field of the national public health, promoting healthy options and a competitive tax climate.