The era of the "flat rate" is ending. In a major policy shift announced recently, the UAE is moving from a blanket 50% excise tax on sweetened beverages to a "Tiered-Volumetric Model" effective January 1, 2026.
For years, the math for importing beverages into the Gulf was simple, if costly: if your product contained added sugar, you generally faced a flat 50% excise tax. It rarely mattered if the item was a high-calorie energy drink or a lightly sweetened organic tea; the financial penalty was largely the same. However, a major policy shift recently announced by the UAE government is effectively ending the era of the flat rate, replacing it with a nuanced system that fundamentally changes the economics of the beverage industry.
Effective January 1, 2026, the UAE is expected to transition to a "Tiered-Volumetric Model" for excise taxes. Under this new framework, import costs will no longer be a blanket percentage but will be determined by the specific grams of sugar per 100ml in the product. The structure is designed to penalize high-sugar formulations while offering significant financial relief—and potentially full exemptions—to products that fall into lower sugar brackets. Crucially, products using only artificial sweeteners or falling below specific sugar thresholds are expected to benefit the most, creating a massive competitive advantage for "Better For You" and diet portfolios.
This regulatory update is more than just a compliance hurdle; it is a clear signal that the region is prioritizing public health over passive consumption. For global manufacturers, this creates an immediate fork in the road. Brands that choose to do nothing risk their high-sugar SKUs remaining prohibitively expensive, eventually losing shelf space to cheaper, lower-taxed competitors. Conversely, strategic reformulation now offers a direct path to profitability. By slightly reducing sugar content to drop a product from a "High" to a "Moderate" tier, brands can potentially save millions in annual duties, allowing for more competitive pricing on the retail shelf without sacrificing brand equity.
However, capitalizing on these lower rates requires rigorous documentation and foresight. To benefit from the tiered system, brands will need to obtain Accredited Conformity Certificates from the Ministry of Industry and Advanced Technology (MoIAT) to scientifically prove their sugar content. Without this specific certification, imports will likely default to the highest possible tax bracket regardless of their actual ingredients.
This is where SLQ Global acts as your strategic navigator. We are already actively working with our partners to audit beverage portfolios, manage the complex certification process with the Federal Tax Authority, and ensure that your products are not just compliant, but optimized for the highest possible margins.
The deadline may be set for 2026, but with reformulation and certification cycles taking months, the preparation must begin today.
Contact SLQ Global to discuss a portfolio audit and ensure your brand is ready for the new tax landscape.