What Is The New Sugar Tax Rule In The UAE That Aims To Incentivise Manufacturers?

Recently, the UAE Ministry of Finance and Federal Tax Authority made a landmark decision. It revealed how they are changing the way sugar-sweetened beverages will be taxed. From 2026 onwards, an excise tax will be imposed on sugar-sweetened beverages or the SSBs. And it aims to incentivise manufacturers that enable them to reduce sugar levels.

UAE To Introduce Sugar-Related Tax

As revealed in a report by the Gulf News, the excise tax that is expected to be imposed on sugar-sweetened beverages from 2026 will be linked to the sugar content in the product. As a result, it is going to replace the previously applied fixed percentage-based rate. Going by the new model, the aim is to allow manufacturers to reduce sugar levels in their products by incentivising them. As a result, it is going to encourage healthy dietary choices amongst the consumers.

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More About This Tax

With this early announcement, suppliers, importers, and other important stakeholders in the industry will get sufficient time to adapt to this in their systems. Not to mention, they can also review product formulations and prepare a plan so that they can be ready for the tax when it takes effect in 2026. As it happens, awareness campaigns are also expected to be launched so that there is a smooth and comprehensive understanding of the new mechanism.

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So to summarise, the new sugar tax will be based on the sugar levels in the beverage, and this will, in turn, incentivise manufacturers to use less sugar in their product. Finally, consumers will get access to products that useless sugar, thereby promoting a healthier choice.

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