The UAE Ministry of Finance on 6 August introduced a minimum excise price on liquids used in electronic smoking devices — Dh1 (AED 1) per millilitre. The rule takes effect on 1 September 2026, 26 days after the announcement. Vape importers, distributors and retail have under a month to recalculate the excise base and reset internal pricing formulas.
What the MoF decided
The UAE Ministry of Finance issued a decision setting a minimum excise price on "liquids used in electronic smoking devices and tools". The floor is Dh1 per millilitre. In the ministry's own wording, the decision "introduces a minimum Excise Price of Dh1 per millilitre (mL) for liquids used in electronic smoking devices and tools" and "aims to enhance the effectiveness of excise tax implementation and support compliance with the UAE's tax legislation".
The formula flows directly from the container volume. Public guidance around the decision gives these reference points: a 10 mL bottle — Dh10 minimum excise base, 30 mL — Dh30, 60 mL — Dh60. This is a floor for the calculation base, not the retail price: the actual excise payable is set by the standing rules (100% ad valorem on excise goods), but it cannot fall below the stated minimum.
Where this decision fits
The measure extends the minimum-excise-price mechanism already applied to conventional tobacco products into the e-cig liquid segment. The existing minimum excise prices for cigarettes, water-pipe tobacco and ready-to-use tobacco products remain unchanged. The excise rate on all tobacco products stays at 100%.
The legal spine is Cabinet Decision No. 197 of 2025 "On Excise Goods, Excise Tax Rates and the Methods of Calculating the Excise Price", published by the Ministry of Finance in December 2025. That decree consolidated the UAE's entire excise regime into a single framework, including the methods for calculating the minimum excise price. The August MoF decision is a specific application of that framework to vape liquids.
Who is directly affected
Under UAE rules, excise is formally payable by importers, producers and — in certain scenarios — those who store excise goods. That means the first businesses to reset prices and internal reports to the new minimum base are:
- importers of vape liquids, including through free-zone regimes where excise applies on release for free circulation into the UAE;
- local liquid producers;
- wholesale distributors holding pre-1 September stock;
- retail chains and single outlets — they will need to reset shelf economics for the new inbound cost.
Indirectly, financial and tax advisers serving this segment will pick up work on excise-return recalculation, 1 September stock-take and ERP updates.
Why the MoF is raising the excise floor
The official rationale is uniform application of excise. Per the ministry's wording, the measure "supports consistent application of unified standards" and "limits practices that may affect" the effectiveness of excise-tax implementation. In practice, it closes the low-declared-price loophole on small bottles, where a 100% ad valorem rate produced excise disproportionately small relative to the physical volume of liquid on the shelf.
The Dh1/mL floor levels the base: excise is now calculated on a price no lower than the defined per-mL value, regardless of how the product is labelled. The move fits the broader UAE trend of tightening indirect taxation — in a line with the tiered volumetric model adjustment for sweetened carbonated drinks and the broader excise-framework revision under Cabinet Decision 197/2025. For the wider 2026 tax and regulatory agenda, see our overview of UAE business regulation in 2026.
What businesses should do before 1 September
A practical 26-day checklist:
- Stock-take of vape liquids across warehouses and retail — record volumes (mL) per SKU.
- Recalculate the excise base: for each SKU, compare the current declared excise price with the new Dh1/mL × bottle volume floor. If the old base is lower, the new one applies from 1 September.
- Update ERP/POS: bake the new minimum base into the systems so the tax return does not come out underpaid.
- Lock in positions with the FTA (Federal Tax Authority) on disputable classifications — nicotine salts, disposable e-cig cartridges, hybrid cartridge devices — before disputes appear.
- Negotiate along the supply chain: who absorbs the excise uplift during the transition, and how it flows through existing price contracts.
Companies just entering the UAE market and eyeing the vape-related segment should factor excise into revenue planning from the start. For the basics of UAE indirect taxation — including VAT at 5% and how it interacts with excise — see our explainer on VAT 5% for entrepreneurs.
Primary source and status
The primary document is the Ministry of Finance decision of 6 August 2026, distributed via WAM (Emirates News Agency) and confirmed in specialist business media. The legal base is Cabinet Decision No. 197 of 2025 "On Excise Goods, Excise Tax Rates and the Methods of Calculating the Excise Price", published on the Federal Tax Authority portal. Effective date — 1 September 2026. See the "Official source" block below for the primary release link.
