As of September 1, 2026, the United Arab Emirates has implemented updated excise tax regulations for liquids used in electronic smoking devices. A minimum excise price of 1 dirham per milliliter has been established for this product category.

This new measure complements the existing tax system for electronic cigarettes and other tobacco products and is designed to improve the efficiency of excise tax calculation and collection in the UAE.

What changed on September 1, 2026

Excise tax on electronic smoking devices and the liquids used in them has been in effect in the UAE since 2019. As of September 2026, the tax system has been supplemented with a new minimum price benchmark for liquids.

The minimum excise price is now:

1 AED for every milliliter of liquid for electronic smoking devices and accessories.

This means that when calculating excise liabilities for these products, the government-mandated minimum price level will be taken into account.

The UAE Ministry of Finance announced the introduction of this new rule on August 6, 2026.

Rules for other tobacco product categories remain unchanged

The changes apply primarily to liquids for electronic smoking devices.

At the same time, previously established minimum excise prices remain in effect for other categories of products subject to the relevant tax regulations.

These include:

• cigarettes;
• shisha tobacco;
• ready-to-use tobacco products;
• other similar products subject to UAE excise legislation.

Thus, the new measure does not replace the existing excise system but rather expands it to cover a specific product category.

Excise tax on tobacco products in the UAE is 100%

An excise tax rate of 100% applies to tobacco products and a number of related goods in the UAE.

Excise tax is a type of special tax applied to specific categories of goods.

The UAE Federal Tax Authority views this as a multi-purpose tool: it helps reduce the consumption of products considered harmful to health while generating additional government revenue.

Why the UAE is updating its excise tax system

The market for e-cigarettes and related products is evolving, so tax regulations are gradually adapting to changes in product ranges and consumption patterns.

Establishing a minimum excise price allows for a more uniform approach across different types of liquids and reduces the likelihood of significant tax burden disparities caused by individual product pricing strategies.

The Ministry of Finance attributes these changes to improving the effectiveness of excise tax enforcement and further refining the country's tax system.

What the new measure means for businesses

These changes primarily affect companies that import, manufacture, distribute, or sell e-cigarette liquids in the UAE.

Such market participants must account for the new minimum excise price when fulfilling tax obligations and setting prices for these products.

For businesses, this also means they must carefully monitor product classification and stay updated on the latest requirements from the UAE Federal Tax Authority.

The UAE continues to refine its tax regulations

The introduction of a minimum excise price for e-cigarette liquids is part of the ongoing development of the UAE's tax system.

The country is consistently updating regulations for specific product categories to reflect market changes while maintaining uniform requirements for taxpayers and calculation mechanisms for mandatory payments.

For entrepreneurs and investors operating in the UAE, such changes underscore the importance of complying with current tax legislation and incorporating new regulatory requirements into operational planning in a timely manner.