UAE to Introduce Sugar-Linked Excise Tax on Sweetened Beverages by 2026

There’s a significant development coming out of the UAE that I believe our FMCG clients, particularly those in beverages and consumer goods, should pay close attention to.

The UAE Ministry of Finance and the Federal Tax Authority have announced a major change in how sugar-sweetened beverages (SSBs) will be taxed. Starting in 2026, the excise tax on these products will no longer follow a flat, percentage-based model. Instead, it will shift to a tiered volumetric structure, linking the tax directly to the amount of sugar per 100ml in the product.

In short: the more sugar per 100ml, the higher the tax per litre. This is a clear policy move aimed at encouraging manufacturers to reduce sugar content and promoting healthier dietary choices among consumers, aligning with global public health trends.

From my perspective, this is more than just a tax update - it’s a signal that nutritional reformulation and product transparency are about to become strategic priorities for brands operating in the UAE. FMCG businesses should start thinking now about how their current SKUs stack up against this upcoming model.

The early announcement gives manufacturers, importers, and distributors time to:

• Review and potentially reformulate products.
• Update internal tax systems and labelling.
• Strategically plan for pricing and inventory around the implementation timeline.

The government has stated that awareness campaigns will be launched, and businesses will be given sufficient time to adapt, but make no mistake, this is a big shift for any company dealing in sugary drinks.

We’ll be following this development closely, and we’ll provide detailed updates and guidance for our clients as more information becomes available.

If you’re in the UAE’s FMCG space, now is the time to get ahead of this change.