UAE Sets Dh1 per ml Minimum Excise Price for Vape Liquids Starting September 1

Starting September 1, the UAE Ministry of Finance will enforce a minimum excise price of Dh1 per millilitre for all vape and e-cigarette liquids. The measure establishes a valuation floor to ensure the nation’s 100 percent excise tax applies to a set minimum value, regardless of lower retail selling prices.

Calculating the New Excise Baseline for E-Liquids

Under the new pricing structure, the Federal Tax Authority will calculate the 100 percent excise tax using the Dh1 per millilitre benchmark whenever a product’s retail price falls below that threshold. For example, a 60ml bottle of vape liquid retailing at Dh40 will no longer be taxed at its sale price; instead, tax duties will be calculated as if the item were valued at Dh60.

According to the Ministry of Finance, “The decision aims to enhance the effectiveness of excise tax implementation and support compliance with the UAE’s tax legislation.”

Existing excise valuation guidelines for traditional cigarettes, water pipe tobacco, and other ready-to-use tobacco items remain unchanged under this update.

Expanding Public Health Tax Strategies in the Gulf

The UAE introduced excise taxes—commonly called sin taxes—in 2017 on products considered detrimental to public health, expanding the program in 2019 to cover electronic smoking devices and sugary drinks. This regulatory model was updated on January 1 to scale beverage taxes directly according to sugar content per 100ml.

Medical experts support regulatory controls on e-cigarettes due to lingering health concerns. Dr. Hassan Razein, a pulmonologist at Zulekha Hospital Dubai, noted: “We already knew smoking cigarettes, nicotine and tobacco were dangerous. But it was clear we needed to know more about the full profile of vaping and the hazards.”

A 2024 global study by market research firm Ipsos revealed that three-quarters of 26,950 surveyed tobacco users across 28 countries believed vaping was as harmful to health as smoking traditional cigarettes.

Aviation and Market Impact Across Regional Routes

In a parallel move affecting regional transport, Saudi Arabian carrier Riyadh Air announced an initiative to apply a minimum tax on e-cigarettes carried on flights from Mumbai to the UAE. The measure aligns airline operations with regional public health directives aimed at controlling vape consumption and ensuring regulatory compliance across borders.

This coordinated tightening of fiscal rules increases financial obligations for distributors and retailers dealing in low-cost vape liquids, compelling market players to adjust retail pricing strategies across Gulf markets.

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Matthew Ma

Marketing at Ecigator

With over a decade of experience in the e-cigarette industry, Matthew Ma is a seasoned expert in both the manufacturing and usage aspects of vaping products. His extensive background has provided him with a deep understanding of the intricacies and evolving dynamics of e-cigarettes.