Excise on tobacco, drinks, and vapes.
Excise tax
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Excise rate
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Price plus excise
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A tax meant to change behaviour, not just raise money
Excise tax in the UAE, administered by the Federal Tax Authority, is deliberately aimed at goods the government wants people to consume less of. It landed first on tobacco, energy drinks, and carbonated drinks, then widened to cover electronic smoking devices and the liquids that go in them, plus sweetened drinks. Unlike VAT, which is a small percentage spread across almost everything, excise is a heavy charge concentrated on a short list of categories, and the rates are blunt: 100 percent on the harshest items and 50 percent on the sugary drinks. The point is to push the shelf price up far enough to nudge consumption down. This tool tells you, for a given product category and price, exactly how much of that price is excise. It surfaces the embedded tax directly, rather than leaving you to back it out of the shelf price by guesswork, which helps whether you are a shopper checking what you really pay or a business setting a compliant retail price.
One detail trips everyone up at first. The rate applies to the excise retail price, which is the higher of the producer’s declared retail price or a standard price set by the authority. That is the base you should enter, and the result is the excise built into what you pay at the till.
100 percent really does mean double
Take the default: a tobacco product with an excise retail price of AED 20. Tobacco carries the 100 percent rate the calculator applies, so the excise equals the price itself. The product that costs AED 20 before excise carries AED 20 of tax, and the price plus excise is AED 40. The tax is not a slice of the price, it is the whole price again.
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The chart shows how the 100 percent and 50 percent rates compare on the same AED 20 base, so you can see why a packet of cigarettes and a fizzy drink are taxed so differently.
Two things this estimate does not show
First, VAT stacks on top. The 5 percent standard VAT is generally charged on the excise-inclusive price, so the final receipt is higher again than the price-plus-excise figure here. If you want the full out-of-pocket cost, add VAT to the AED 40, not to the original AED 20. Second, the sweetened-drinks category is changing. A volumetric model, charging per litre according to sugar content rather than a flat 50 percent, was announced to begin in 2026. This tool uses the 50 percent flat rate as its baseline for that category and flags the shift, because the per-litre tiers and their start details need confirming. Treat all of these rates as the calculator’s working assumptions and verify the current excise rates, the excise retail price for your specific product, and the sweetened-drinks volumetric tiers with the Federal Tax Authority before relying on them for pricing.
Excise questions
Do I pay excise as a shopper, or is it the importer’s problem?
Legally, excise is levied on producers, importers, and stockpilers, not collected at the checkout the way VAT is. But it is built into the retail price before it reaches the shelf, so in practice you pay it as a consumer through the higher price. That is exactly the behavioural lever the tax is designed to pull. This tool shows you the embedded amount so you can see what share of the shelf price is excise.
Why are energy drinks taxed at 100 percent but ordinary fizzy drinks only 50 percent?
The categories reflect how the authorities rank the health concern. Energy drinks sit in the top tier alongside tobacco and vaping products at 100 percent, while standard carbonated and sweetened drinks attract 50 percent. If you switch the category in the tool, you can see the rate and the resulting tax change immediately, which makes the policy logic clear. On an AED 20 base that means an energy drink carries AED 20 of excise while a carbonated drink carries only AED 10, the gap reflecting how the health concern is ranked.