UAE has just introduced a brand-new tax – here's what you need to know
Consumers could see the impact at retail counters
DUBAI – The UAE has introduced a new excise tax measure affecting liquids used in electronic smoking devices and tools.
The new rule takes effect from today, September 1, and sets a minimum excise price of Dh1 per millilitre for e-liquids. The move expands the country’s existing excise tax framework covering tobacco and electronic smoking products.
The Ministry of Finance said the decision is aimed at keeping pace with developments in the excise goods market and ensuring consistent standards across tobacco and electronic smoking products.
New rule
The existing 100 percent excise tax rate on tobacco products, electronic smoking devices and liquids used in such devices, introduced in 2019, remains in place. The latest change establishes a minimum excise price of Dh1 per millilitre for liquids used in electronic smoking devices and tools when calculating the applicable tax.
For cigarettes, water pipe tobacco, ready-to-use tobacco products and similar goods, existing minimum excise prices will continue to apply.
Under the UAE’s excise system, manufacturers and importers pay the applicable tax to the Federal Tax Authority, while retailers sell products with the duty incorporated into their prices. This means the tax can affect the amount consumers pay at the point of purchase.
Other products
Excise tax also applies to selected beverages and other goods. Energy drinks are subject to a 100 percent rate, while carbonated drinks and products containing added sugar or other sweeteners are covered by excise taxation.
The UAE also changed its sugar tax structure on January 1, 2026. Previously subject to a flat 50 percent rate, sweetened drinks are now taxed according to their sugar content per 100 millilitres, while artificially sweetened and low-sugar drinks are largely exempt.