From January 2026, the cost of sugary drinks in the UAE will depend on their sweetness level. The Ministry of Finance and the Federal Tax Authority (FTA) have announced a major change to the country’s excise tax system on sugar-sweetened beverages (SSBs). Instead of the current flat 50% tax rate, a new tiered system will link tax per litre to the drink’s sugar content per 100ml; the more sugar, the higher the tax.
The move aims to curb sugar consumption, promote healthier choices, and encourage manufacturers to reduce sugar levels in their products. The UAE has one of the highest diabetes rates in the region, with over 20% of the adult population affected, according to recent health data.
What’s Changing?
Under the new model:
- Drinks with lower sugar content will be taxed at a lower rate.
- High-sugar beverages will face increased excise duties, making them more expensive for consumers.
- The tax calculation will no longer be based on product type alone, but on its nutritional content.
This approach, officials say, gives consumers clearer information about what they’re drinking while pushing manufacturers toward healthier formulations.
Why It Matters
The policy shift is part of the UAE’s wider strategy to improve public health and reduce the burden of lifestyle diseases like obesity and Type 2 diabetes. It also aligns with Gulf-wide efforts to unify tax frameworks and use fiscal tools to drive better health outcomes.
“This enhanced model encourages manufacturers to reduce added sugars and empowers consumers to make informed dietary choices,” the Ministry of Finance said.
Authorities are giving businesses over a year to prepare for the changes, which will require updates to pricing, packaging, and supply chain systems. Awareness campaigns and more details will follow in the coming months.
How Will It Impact You?
For consumers, this means the price of your favourite soft drink, juice, or energy beverage may vary based on how much sugar it contains. Drinks with less sugar, or no sugar, are likely to become more competitively priced.
For example, if you reach for a full-sugar soda, expect to pay more than you would for a reduced-sugar or sugar-free version of the same brand.
Major producers such as Coca-Cola and PepsiCo are already adapting. In 2023, nearly 30% of Coca-Cola’s drinks sold in the UAE were low or zero-calorie, and 68% contained less than 100 calories per 355ml serving. Companies are now exploring sugar alternatives like stevia to maintain taste while reducing calories.
What’s Next?
The updated sugar tax model will come into effect in early 2026, pending the release of implementing legislation. Until then, businesses, importers, and retailers are being encouraged to prepare, with health authorities working closely with the tax authority to ensure a smooth transition.
While it’s unclear if the new rules will affect alcoholic drinks, the broader message is clear: the sweeter the drink, the higher the price tag, and that’s by design.
