The UAE Ministry of Finance has introduced a minimum excise price of AED 1 per millilitre for liquids used in electronic smoking devices, with effect from 1 September 2026. Announced on 6 August, the decision leaves the country's 100% excise rate on vapor products untouched — what moves is the taxable base.
Industry observers note the practical effect is a floor, not a hike. Previously, the excise price was set at the greater of the Federal Tax Authority's standard price and the designated retail price excluding tax, and there was no lower bound. Brands that listed product cheaply could keep the base — and therefore the tax — low. The new threshold stops that: no liquid for an electronic smoking device may be assessed below AED 1/ml, nicotine or not.
The arithmetic is straightforward for exporters. A 10 ml unit now carries a minimum excise value of AED 10; a 30 ml unit AED 30; 60 ml AED 60; 100 ml AED 100. Where a product's normal excise value is already above those figures, nothing changes. The pressure lands on large-format, low-price SKUs — the kind of 60 ml bottle that might retail at AED 40 but will now be taxed as AED 60.
The legal footing is Cabinet Decision No. 137 of 2026, which replaces Cabinet Decision No. 55 of 2019; the underlying 100% rate sits in Federal Decree-Law No. 7 of 2017 and Cabinet Decision No. 197 of 2025. Traditional tobacco minima are unaffected.
For suppliers into the Gulf, the takeaway is operational: re-price the SKU range before September, because volume has become a tax input, not just a packaging choice. In a regime that floors the base, the edge goes to suppliers who are certified and consistent.
Read the full analysis on the YTOO official site: https://www.ytoojuice.com/uae-excise-minimum-tax-base-1-aed-per-ml-2026/
YTOO tracks global vapor policy shifts and provides compliant, stable ODM/OEM customization for export brands. This article is market analysis and not tax or legal advice; confirm specifics with the UAE Ministry of Finance, the Federal Tax Authority, and a qualified advisor.
