A significant change to the UAE’s excise tax on sweetened drinks is now reshaping prices for consumers. Effective January 1st, the new system taxes beverages based on their sugar content per 100ml, replacing the previous flat 50% tax on retail price. The reform creates clear tiers: drinks with 8g or more of sugar face a Dh1.09 per litre duty, those with 5-7.99g are taxed Dh0.79 per litre, while beverages below 5g and artificially sweetened drinks are now exempt.
The shift is already visible in stores, making many diet and low-sugar options cheaper, while raising prices on some high-sugar, low-cost products. Energy drinks remain under a separate 100% excise tax. The move aims to incentivize manufacturers to reduce sugar content and encourage healthier consumer choices, moving beyond the old system’s primary focus on revenue generation.
