Old vs New Excise Rates: 2017–2026 Compared

Tobacco, vapes and energy drinks stayed at 100%; the drinks categories were rebuilt from scratch.

The headline changes: carbonated drinks lost their standalone 50% category — fizz alone no longer triggers excise; a fizzy drink is taxed only if it qualifies as a sweetened drink (per litre) or an energy drink (100%). Sweetened drinks moved from 50% of price to per-litre amounts set by sugar bands. The tobacco, device, liquid and energy-drink categories continued at 100%, now defined with updated articles and customs-code references.

The changeover demanded a compliance reset: reclassify every SKU against the five new categories; band every sweetened drink with an accepted lab report (no report = top band); update RSP declarations; reconfigure ERP banding and rounding logic; review supply contracts priced under the old rates; and brief warehouse and sales teams on the new categories.

Stock held across 1 January 2026 sits on a legal boundary — check the FTA's transitional guidance for your goods rather than assuming either regime. Contracts with tax-change clauses needed renegotiation; those without needed amendment.

Per-litre taxation reshuffled drink economics: low-sugar and diet drinks became cheaper to tax (many at AED 0.79 or AED 0), while high-sugar flagships moved to AED 1.09 per litre regardless of price positioning. Premium-priced low-sugar drinks won; cheap high-sugar drinks lost.

For tobacco, vapes and energy drinks, continuity ruled — the 100% rate and the halving calculation survived intact, so pricing models needed no rebuild, only re-verification against the new articles.

Run this checklist against your operation: (1) every SKU reclassified under the five CD 197 categories; (2) no price list, contract or system still references 50% carbonated or sweetened rates; (3) sweetened drinks banded with current accepted lab reports; (4) RSP declarations updated and evidenced; (5) ERP logic handles per-litre bands and two-stage rounding; (6) monthly returns map to the new articles; (7) supply contracts reviewed for tax-change clauses; (8) warehouse and sales teams briefed on the new categories.

Any unchecked box is open risk. The 2026 rewrite rewarded businesses that treated it as a fresh baseline — and penalises those still running 2019 logic.

The 2026 rewrite will not be the last word: watch for the Minister's customs-code decisions under Articles 3–5, FTA procedures on average market prices, and any band adjustments. Build a change-monitoring habit — FTA website, adviser alerts, industry groups — and re-run the readiness assessment annually.

Tax rules change: confirm the current position on tax.gov.ae before you file, pay or rely on any figure on this page.