The UAE is introducing a new tiered sugar tax on sweetened beverages starting January 1, 2026. Instead of a flat 50% tax, drinks will be taxed proportionally to their sugar content. A higher sugar content means a higher tax and vice versa. This aligns the UAE with global best practices and incentivizes both consumers to drink fewer sugary drinks and manufacturers to reduce sugar consumption.
Why is this important?
- Better public health: Tiered taxes like those in the UK have been proven to push manufacturers to lower sugar in what’s sold, with studies showing a 35% drop in total sugar purchased from soft drinks and millions of kilograms of sugar removed from shelves each year.
- Fairer and clearer pricing: Linking tax directly to the sugar content, rather than a blanket rate, makes prices more transparent and rewards people who choose drinks with less sugar. Businesses will also benefit from a smooth transition, with a deduction for stock that was previously taxed at 50% but now qualifies for a lower rate.
What you might expect to see in stores next year:
- Drinks with high sugar (regular sodas, energy drinks): likely to see steeper price increases.
- Mid-sugar drinks: moderate price changes.
- Low- and zero-sugar options: may be much cheaper than before. Expect brands to introduce new “reduced sugar” lines and reformulate current products to meet lower tax tiers.
Are “diet” and zero-sugar drinks a healthier option?
Here’s what research tells us:
- Weight management: The World Health Organization (WHO) does not recommend non-sugar sweeteners for long-term weight control—meta-analyses show little sustained benefit. However, replacing sugary drinks with diet alternatives can result in modest, short-term weight loss, especially if it helps you reduce overall intake.
- Diabetes and blood sugar: Non-nutritive sweeteners do not raise blood glucose when used to replace sugar in people with diabetes.
- Long-term health risks: Some observational studies link frequent consumption of diet drinks and artificial sweeteners with increased cardiovascular risk and liver disease, though these cannot prove direct causation, so moderate consumption is best.
Our practical advice:
- Make water or unsweetened drinks your first choice—these will always be best for your health and budget.
- If you regularly drink sugary sodas or juices, consider switching to low- or zero-sugar versions as a stepping stone while you build habits around water and minimally sweet options.
- Pay attention to the new “sugar per 100 ml” labels; prices and health impact will increasingly reflect this number.
- Expect plenty of new low-/no-sugar drinks and reformulations on shelves as brands adapt. Use the price signals to make healthier choices for yourself and your family, but always check the ingredients to make sure they are still a healthy option. Low or zero sugar does not equate to being extra healthy.
Like the intention of this tax, we hope these nudge everyone to make healthier choices, while supporting public health and a modern, fair tax system.
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