The UAE Ministry of Finance announced a minimum excise price of Dh1 per milliliter for e-cigarette and vape liquids, taking effect on September 1. This measure establishes a baseline value for calculating the country’s 100% “sin tax,” ensuring cheaper products do not bypass high tax rates.
How the New Vape Tax Calculation Works
Under the updated rules, if the retail price of vape liquid falls below the Dh1 per milliliter threshold, the tax is still calculated using the minimum value. For example, a 60ml bottle of vape liquid retailing at Dh40 will be taxed as if it were priced at Dh60.
“The decision aims to enhance the effectiveness of excise tax implementation and support compliance with the UAE’s tax legislation,” the ministry stated. Existing excise prices for traditional cigarettes, water pipe tobacco, and ready-to-use tobacco products remain unchanged.
UAE’s Expanding Sin Tax Strategy
The UAE first introduced excise taxes in 2017 on tobacco products and sugary drinks to reduce the consumption of harmful goods and prevent chronic illnesses. The program expanded in 2019 to include electronic smoking devices and liquids. This latest adjustment follows a similar policy update on January 1, which linked beverage taxes directly to sugar content.
The tax adjustment aligns with ongoing public health debates. A 2024 global Ipsos poll of 26,950 tobacco users showed that three-quarters of smokers believe vaping is as harmful as smoking. Dr. Hassan Razein, a pulmonologist at Zulekha Hospital Dubai, supported this view, stating that “smoking and vaping should be viewed as equally detrimental to health.”
By raising the tax floor on cheaper e-liquids, the government aims to influence consumer choices and curb the accessibility of alternative nicotine products among budget-conscious users.
