The Ministry of Finance has announced the enactment of Cabinet Decision No. “197” of 2025 regarding excise goods, the tax rates or amounts applied to them, and the methodology for calculating the excise tax. This new decision introduces modifications to the excise tax, implementing a “tiered volume model” for sweetened beverages. It will replace Cabinet Decision No. “52” of 2019 concerning excise goods and their respective taxes and amendments.
This change aligns with the government’s efforts to promote public health and encourage a healthier consumption pattern among the community, following recent amendments to Federal Decree Law No. “7” of 2025 concerning excise taxation.
The amendment aims to clarify the goods subject to excise taxation, along with the applicable rates and values, within a unified legislative framework to facilitate understanding and compliance among all taxpayers.
The new regulation introduces a tiered volume model for sweetened beverages, where the tax is assessed based on the sugar and sweeteners content per 100 mL of the drink. A tax of 0.79 dirhams per liter will be imposed on sweetened beverages containing 5 grams or more but less than 8 grams of sugar and other sweeteners per 100 mL. Conversely, beverages with 8 grams or more of sugar and other sweeteners per 100 mL will incur a tax of 1.09 dirhams per liter. Sweetened drinks with less than 5 grams of sugar and other sweeteners per 100 mL, or those containing only artificial sweeteners, will be taxed at a rate of zero.
The amendment also outlines procedures in cases where taxpayers fail to submit required laboratory reports or documentation to the authority when registering or amending the registration of sweetened beverages in the excise goods registration system. If such reports are not provided, the tax will be applied according to the highest category of sugar and sweeteners content. Should a certified laboratory report be submitted later verifying that the actual content is lower than the highest category, the registration of those beverages will be adjusted accordingly.
The outlined amendments regarding the tiered volume model for all taxpayers will take effect starting January 1, 2026.
The Ministry of Finance emphasized that these modifications are part of the government’s strategy to enhance public health while providing a clear and unified framework for excise taxation that benefits both consumers and investors.