Key Points
- The UAE Ministry of Finance will introduce a minimum excise price for vape liquids from September 1, 2026.
- The minimum taxable price will be AED 1 per millilitre.
- The 100% excise tax rate on tobacco and electronic smoking products remains unchanged.
- The policy changes the tax calculation base rather than increasing the tax rate.
- Existing minimum excise prices for cigarettes, shisha tobacco and ready-to-use tobacco products remain unchanged.
2Firsts
August 7, 2026
According to UAE English-language media outlets The National and Arabian Business on August 6, 2026, the UAE Ministry of Finance will introduce a minimum excise price for liquids used in vaping and electronic smoking devices from September 1, 2026.
Under the new rule, the minimum excise price will be set at:
AED 1 per millilitre.
The UAE Ministry of Finance said the measure aims to establish unified excise tax standards, support market compliance and prevent pricing practices that could undermine the excise tax framework.
The change does not increase the existing excise tax rate.
A 100% excise tax rate will continue to apply to tobacco and electronic smoking products.
UAE Sets Minimum Taxable Price for Vape Liquids
From September 1, 2026, e-liquids and liquids used in electronic smoking devices will be subject to a minimum excise price of AED 1 per millilitre.
The rule means:
- If a product’s actual price is above the threshold, existing excise tax rules will apply based on the applicable calculation method.
- If a product’s price is below the threshold, the taxable base cannot fall below AED 1 per millilitre.
For example, a 60ml bottle of e-liquid will have a minimum taxable base of AED 60, even if its actual retail price is lower.
100% Excise Tax Rate Remains Unchanged
The UAE’s latest measure focuses on the excise tax calculation base rather than the tax rate.
According to Arabian Business, the UAE’s:
100% excise tax rate continues to apply across all tobacco and electronic smoking products.
Existing minimum excise prices remain unchanged for:
- cigarettes;
- water pipe tobacco (shisha);
- ready-to-use tobacco products.
The new rule primarily applies to e-liquids and liquids used in electronic smoking devices.
Government Aims to Standardize Tax Framework
The UAE Ministry of Finance said the new minimum excise price will:
- ensure unified tax standards across tobacco and vaping products;
- support market compliance;
- prevent pricing loopholes affecting the excise tax system.
The measure is part of the UAE’s broader efforts to strengthen excise tax administration for tobacco, vaping and other consumer products.
New Rule May Affect Vape Pricing Strategies
For the vaping industry, a minimum taxable price may affect how companies and retailers evaluate pricing strategies for e-liquid products.
Lower-priced products may need to reassess their cost structures and pricing approaches under the revised tax calculation framework.
However, public information has not disclosed the expected impact on:
- retail prices;
- consumer demand;
- market sales.
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Cover Image source: The Nationa
