United Arab Emirates : The Ministry of Finance and the Federal Tax Authority announced an amendment to the mechanism for applying excise tax on sweetened beverages. The move will see the transition to a "graded volumetric model," which links the tax value imposed on each liter of sweetened beverage to the amount of sugar in every 100 ml. The higher the sugar content per 100 ml, the higher the tax value per liter. This is in contrast to the unified rates currently applied to these beverages. This amendment comes as part of the country's efforts to promote public health, reduce consumption of high-sugar products, and encourage manufacturers to reduce sugar content in beverages .

The announcement of this policy is part of a proactive approach aimed at giving suppliers, importers, and relevant entities a period of time to prepare for the next phase. This includes updating their internal systems, examining the composition of their products, and updating their records with the Federal Tax Authority to comply with the requirements of the updated model. This will continue until the legislation regulating the implementation mechanism is officially issued, as the updated mechanism is scheduled to take effect in early 2026.

The Ministry of Finance emphasized that this improved model reflects the state's commitment to adopting flexible financial and legislative tools that support healthy lifestyles. This is achieved by linking the new tax system to the level of health impact associated with the amount of sugar in a product, rather than relying solely on its classification.

The ministry explained that this move comes in the context of supporting Gulf integration in tax policies and promoting the use of taxes as an effective tool for achieving sustainable development goals. It also confirmed that comprehensive awareness campaigns will be launched to support the transition phase and ensure business readiness for practical implementation upon the adoption of the legislative instrument regulating it, in cooperation with the Federal Tax Authority and health and regulatory authorities.

It's worth noting that this system was developed in cooperation and coordination with the Ministry of Health and Community Protection to ensure its alignment with national health goals and achieve a tangible positive impact in improving food consumption patterns.

Businesses in the country will be given sufficient time to prepare for the implementation of the updated mechanism. Further details about the new system will be announced in the coming period to support businesses in preparing for implementation and ensuring full compliance with the new policies.

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