The United Arab Emirates will impose a minimum excise price of AED1 per milliliter on e-liquid beginning Sept. 1. The decision creates a new floor for calculating the country’s 100 percent excise tax on vaping liquids.
The Ministry of Finance announced the change on Aug. 6, saying the new minimum is intended to improve tax compliance and create consistent standards across tobacco and electronic smoking products. The tax rate itself is not changing.
Under Cabinet Decision No. 137 of 2026, the excise price assigned to vaping liquids cannot be less than AED1 per milliliter. The rule applies to liquids used in electronic smoking devices, whether or not they contain nicotine.
That means a 10 mL bottle would have a minimum excise-price base of AED10, while a 30 mL bottle would have a minimum base of AED30. If the price calculated under the UAE’s existing excise rules is higher, the higher value applies.
The Federal Tax Authority (FTA) currently lists e-liquids and electronic smoking devices as products subject to a 100 percent excise tax. For goods taxed at 100 percent, the FTA says the excise amount is generally equal to half of the tax-inclusive retail price when that retail price is used as the excise-price basis.
The new decision therefore does not double the existing tax. Instead, it prevents importers or producers from using an excise value below AED1 per milliliter when the tax is calculated. The practical effect will be greatest on liquids that would otherwise carry a lower declared or calculated excise price.
The cabinet decision also keeps existing minimum excise prices for cigarettes and waterpipe tobacco. Cigarettes retain a floor of AED0.40 each, while waterpipe tobacco and similar products remain at AED0.10 per gram.
The decision was issued July 24 and takes effect Sept. 1. It also repeals Cabinet Decision No. 55 of 2019 and any provisions that conflict with the new rule.
For UAE vape businesses, the change adds another fixed cost floor to a market already taxed at the same 100 percent rate applied to cigarettes. Whether retailers absorb that additional tax burden or pass it through in higher prices will depend on how each product was priced and declared before the new minimum takes effect.
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