The UAE has announced a new tax measure for liquids used in electronic smoking devices, introducing a minimum excise price of AED1 per millilitre. The new rule, issued by the Ministry of Finance, will come into effect on September 1, 2026, and is aimed at strengthening the country’s excise tax system while ensuring consistent taxation across vaping products.
The decision applies specifically to liquids used in electronic smoking devices and tools, commonly known as e-liquids or vape liquids. It does not introduce a minimum retail selling price. Instead, it sets the minimum value that will be used to calculate excise tax, regardless of how much the product is sold for.
In simple terms, even if a vape liquid is sold at a discounted price, excise tax will still be calculated using the minimum excise price set by the government if the declared value falls below that threshold.
For consumers, this does not necessarily mean vape products will immediately become more expensive. The announcement focuses on the taxable value of the products rather than the prices retailers charge. Any impact on retail prices will depend on how manufacturers, importers and retailers respond once the new rule takes effect.
The Ministry of Finance said the move is intended to strengthen compliance with the UAE’s excise tax legislation and keep pace with developments in the electronic smoking market. It also aims to ensure that a unified approach is applied across products subject to excise tax.
Under the new framework, the minimum excise price will be calculated based on the volume of the e-liquid. A 10mL bottle will have a minimum excise price of AED10, while a 30mL bottle will have a minimum excise price of AED30. Likewise, a 60mL bottle will have a minimum excise price of AED60.
These figures represent the minimum taxable value rather than the amount consumers will pay at the checkout.
The latest announcement does not change the existing minimum excise prices for other tobacco products. According to the Ministry of Finance, the current minimum excise prices for cigarettes, water pipe (shisha) tobacco, ready-to-use tobacco products and similar tobacco products will remain unchanged.
The UAE already imposes a 100% excise tax on tobacco products and electronic smoking products covered under its excise tax regime. The newly introduced minimum excise price for vape liquids will become part of that existing framework from September.
Excise tax is levied on selected goods that are considered harmful to public health or the environment. The system was introduced in the UAE to discourage the consumption of such products while also generating government revenue. Since its introduction, the framework has been updated periodically to reflect changes in products available in the market, including the growth of electronic smoking devices.
By introducing a minimum excise price for vape liquids, authorities are seeking to ensure that tax calculations remain consistent regardless of pricing strategies adopted by businesses. This helps prevent situations where products are assigned artificially low values for tax purposes, ensuring that all eligible products are taxed using a common minimum benchmark.
The Ministry of Finance described the measure as part of its ongoing efforts to improve the efficiency of the UAE’s excise tax system and align it with changes in the market for electronic smoking products.
The new rule will officially come into force on September 1, 2026, adding liquids used in electronic smoking devices and tools to the UAE’s minimum excise price framework while leaving the existing rules for other tobacco products unchanged.
