Effective 1 September 2026, the United Arab Emirates will apply a minimum excise price of AED 1 per millilitre to liquids used in electronic smoking devices and tools. The Ministry of Finance announced the measure on 6 August 2026. The existing 100% excise tax rate on these products is unchanged.
This is a change to the tax base, not the tax rate. Under the prior framework, the excise price was the higher of the Federal Tax Authority’s published standard price and the designated retail price net of tax — with no absolute floor. Low list prices could therefore pull the taxable base, and the tax, down. The new rule sets a hard floor: regardless of how the old calculation comes out, the excise price may not fall below AED 1/ml.
Scope and mechanics
- Applies to liquids for electronic smoking devices and tools, with or without nicotine.
- A 10 ml bottle carries a minimum excise price of AED 10; 30 ml → AED 30; 60 ml → AED 60; 100 ml → AED 100.
- Where the ordinarily calculated excise price already exceeds the floor, the higher value still applies.
- Traditional tobacco minimums (cigarettes AED 0.40 per unit, waterpipe tobacco AED 0.10 per gram) are unchanged.
Who it affects High-volume, low-unit-price SKUs feel the shift most. A 60 ml product listed at AED 40 will be taxed on AED 60. The measure targets pricing structures that previously kept the declared base below AED 1/ml.
Legal basis Issued under Cabinet Decision No. 137 of 2026, replacing Cabinet Decision No. 55 of 2019. The 100% regime derives from Federal Decree-Law No. 7 of 2017 (as amended) and Cabinet Decision No. 197 of 2025.
Why it matters The Ministry’s stated aims are to keep pace with the excise-goods market, apply consistent standards across tobacco and vapor categories, support compliance, and limit practices that could weaken effective excise implementation. Since the 2017 rollout, national health surveys have shown a lower adult smoking rate — a reminder that excise tax serves both revenue and public-health goals, even as legitimate-price gaps versus the gray market remain a watchpoint.
What exporters should do Re-model every SKU against the AED 1/ml floor before September. Capacity is now a tax parameter as much as a product decision. In a market where the base is unified, certified, stable supply chains hold the advantage.
YTOO follows global vapor policy and provides compliant, stable ODM/OEM for export brands. This is market analysis, not tax or legal advice.
