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UAE to introduce sugar tax on drinks from 2026: Here’s what it means for residents

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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.

With over 35 years of experience in journalism, copywriting, and PR, Michael Gomes is a seasoned media professional deeply rooted in the UAE’s print and digital landscape.

Automobile

Legend Motors launches Kaiyi X7 AWD and X7 PHEV SUVs in UAE, strengthening Chinese automaker’s expansion

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Legend Motors has expanded its product portfolio in the UAE with the launch of two new Kaiyi SUV models, the Kaiyi X7 AWD and the Kaiyi X7 PHEV, as the Chinese automotive brand strengthens its presence in one of the Gulf’s fastest-growing vehicle markets.

The latest launches underline Kaiyi’s strategy to grow its footprint across the Middle East by offering both conventional internal combustion engine vehicles and new-energy models that cater to evolving consumer preferences.

Speaking during the launch event in Dubai, Cannon Wang, Group Vice President, Leadership and Strategy at Legend Holding Group, said the UAE remains a strategic market for the company’s regional ambitions.

“Dubai represents a global benchmark for automotive excellence, where innovation and customer expectations come together. It is a natural gateway for Kaiyi’s regional expansion, and we see strong long-term potential in the UAE market as we introduce products that combine technology, value and performance,” Wang said.

The newly introduced Kaiyi X7 AWD is powered by a 2.0-litre turbocharged four-cylinder petrol engine producing 256 horsepower and 390Nm of torque. The SUV is paired with a seven-speed wet dual-clutch transmission and an all-wheel-drive system, enabling it to accelerate from 0 to 100 km/h in approximately 6.9 seconds.

Alongside it, the company unveiled the Kaiyi X7 PHEV, a plug-in hybrid SUV that combines a 1.5-litre turbocharged petrol engine with an electric motor and a lithium iron phosphate battery pack. The vehicle offers an all-electric driving range of up to 150 kilometres under the CLTC testing cycle and features EV, Hybrid and Power Assist driving modes.

The launches come as Chinese automotive manufacturers continue to expand their presence across the Gulf region, driven by increasing demand for technologically advanced SUVs and electrified vehicles.

The UAE automotive market records annual new vehicle sales of around 300,000 units, with SUVs accounting for nearly half of total sales. The growing preference for fuel-efficient and technology-focused vehicles has encouraged several global and Chinese manufacturers to broaden their product offerings in the country.

Tony Wu, Deputy General Manager of Kaiyi International, said the company remains committed to supporting the UAE’s transition toward cleaner mobility while continuing to serve customers seeking petrol-powered vehicles.

“Aligned with Dubai’s Vision 2030, we see a clear direction towards accelerating the adoption of new energy vehicles. While our petrol-powered E5 and X3 models continue to perform strongly among retail and fleet customers, we are equally committed to supporting the region’s shift towards cleaner, future-ready mobility solutions,” Wu said.

Harsh Chaturvedi, General Manager of Kaiyi UAE, said the company’s focus is on making advanced automotive technology accessible to a wider customer base.

“True innovation lies in making cutting-edge technology accessible, practical and aligned with the everyday expectations of our customers. It’s not just about specifications but delivering a refined sense of control, comfort and modern luxury,” he said.

Through its UAE operations under Legend Motors, the automotive division of Dubai-based Legend Holdings, the company is also investing in after-sales services, spare parts availability and customer support as it seeks to strengthen its presence across the UAE and the wider GCC market.

The launch of both petrol-powered and plug-in hybrid variants reflects Kaiyi’s broader strategy of offering multiple powertrain options as demand for electrified mobility continues to grow across the Middle East.

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Announcements

Good news for businesses: Sharjah slashes fees and fines

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Businesses in Sharjah can now benefit from a range of temporary fee reductions after Sharjah Police unveiled a new package of incentives aimed at easing costs and supporting the emirate’s business community.

The measures, introduced in line with a decision by the Sharjah Executive Council, include 50% discounts on several security-related fees, along with reduced fines and lower training costs for companies.

What discounts are available?

Under the new initiative, eligible businesses will receive:

  • 50% off security permit renewal fees for commercial activities
  • 50% off security system subscription fees
  • 50% reduction on eligible violations and fines
  • 20% off mandatory training programme fees for companies

Sharjah Police said the initiative is designed to support commercial establishments, encourage business sustainability and further strengthen the emirate’s position as an attractive destination for investment.

How long will the discounts last?

The incentives will be available for three months from the date the decision comes into effect.

Businesses seeking more information about the discounts and eligibility can contact the Sharjah Police Call Centre on 901.

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Business

UAE fuel prices drop sharply: Here’s what you’ll pay from July 1

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Motorists across the UAE will pay significantly less at the pump from July 1 after the UAE Fuel Price Committee announced a sharp reduction in petrol and diesel prices for July 2026.

All fuel grades have become cheaper compared to June, with Super 98 falling by 55 fils per litre, while diesel has dropped by 73 fils per litre.

All fuel grades have become cheaper compared to June, with Super 98 falling by 55 fils per litre, while diesel has dropped by 73 fils per litre.

Fuel prices for July

  • Super 98: Dh3.40 per litre (down from Dh3.95)
  • Special 95: Dh3.29 per litre (down from Dh3.83)
  • E-Plus 91: Dh3.21 per litre (down from Dh3.76)
  • Diesel: Dh3.60 per litre (down from Dh4.33)

The new rates take effect on Tuesday, July 1, 2026.

The UAE Fuel Price Committee reviews retail fuel prices every month, with rates adjusted in line with movements in global oil and energy markets.

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