ع
The Ministry of Finance announced a decision establishing a minimum excise price of AED 1 per millilitre for liquids used in electronic smoking devices and tools, with the measure scheduled to take effect on 1 September 2026. The policy maintains existing minimum excise prices for cigarettes, water pipe tobacco, ready-to-use tobacco products and similar items, according to the ministry announcement. Officials framed the update as a response to market developments in excise goods that requires consistent application of unified standards to support overall tax legislation.
The new floor applies specifically to e-liquids on which the UAE levies a 100 per cent excise tax rate, the Ministry of Finance reported. This approach prevents undervaluation practices that can undermine the tax base since the levy is calculated as a percentage of the excise price. The decision forms part of ongoing refinements to the excise system that covers goods considered harmful to health.
Excise tax was introduced across the UAE in 2017 on tobacco products, electronic smoking devices, their liquids and certain other categories, according to the official UAE government platform. The standard rate stands at 100 per cent for tobacco, electronic smoking devices and associated liquids, the platform states. Expansion of the regime to include these electronic products occurred in subsequent years under the GCC Unified Agreement on Excise Taxation.
Federal Tax Authority administration of the updated minimum price will begin next month, building on earlier enforcement actions that have targeted non-compliant excise goods. The Ministry of Finance noted that the adjustment aims to limit practices affecting excise tax implementation while ensuring revenue collection reflects actual market values. Similar minimum price mechanisms already govern traditional tobacco categories to maintain uniformity.
Recent related policy changes include a tiered volumetric excise model for sweetened beverages that takes effect on 1 January 2026, with rates linked to sugar content per 100 millilitres, according to separate Ministry of Finance announcements. That framework sets taxes at AED 0.79 per litre for drinks containing 5 to less than 8 grams of sugar and AED 1.09 per litre for those with 8 grams or more. Energy drinks remain subject to the existing 100 per cent rate and are excluded from the new beverage model.
The latest decision on electronic smoking liquids aligns with the broader excise framework that requires registration, digital tax stamps and compliance procedures for all taxable persons, the Federal Tax Authority has stated in guidance documents. Importers, manufacturers and distributors must adhere to the minimum price when determining the taxable base for e-liquids after 1 September. The policy forms one element in the UAE’s continued efforts to adapt tax rules to evolving product categories and market conditions.
