UAE Introduces Minimum Excise Price for Electronic Smoking Liquids

The UAE has introduced a minimum Excise Price for liquids used in electronic smoking devices and tools under Cabinet Decision No. 137 of 2026. Effective from 1 September 2026, the Excise Price for these liquids cannot be lower than AED 1 per millilitre. The rule applies to liquids used in electronic smoking devices whether or not they contain nicotine.

The Ministry of Finance said the measure is intended to strengthen the effectiveness of the UAE's Excise Tax framework and establish more consistent treatment across tobacco and electronic smoking products.

It is important to distinguish between the Excise Tax rate and the Excise Price on which that tax is calculated. Liquids used in electronic smoking devices remain subject to a 100% Excise Tax rate under the UAE Excise Tax framework. The new decision does not increase that percentage. Instead, it establishes a minimum taxable value below which the Excise Price cannot fall.

For example, the minimum Excise Price implied by the new rule would be:

• 10 ml of e-liquid: AED 10

• 30 ml: AED 30

• 60 ml: AED 60

• 100 ml: AED 100

If the Excise Price calculated under the normal UAE rules is higher than the applicable minimum, the higher value continues to apply.

Cabinet Decision No. 137 of 2026 also confirms minimum Excise Prices for certain tobacco products.

The Decision sets the minimum at AED 0.40 per cigarette and AED 0.10 per gram for water-pipe tobacco, ready-to-use tobacco and similar products. These tobacco minimums are not the main new development. The significant change is the introduction of the AED 1 per millilitre floor for electronic smoking liquids.

The Decision also repeals Cabinet Decision No. 55 of 2019 and any provisions that conflict with the new framework.

Businesses should not assume that an e-liquid falls outside the rule because it does not contain nicotine. Cabinet Decision No. 137 expressly defines liquids used in electronic smoking devices as including relevant liquids whether or not they contain nicotine.

Product classification therefore remains an important compliance issue for importers, manufacturers and other businesses dealing with electronic smoking products.

The new minimum can affect businesses where the Excise Price previously calculated for a particular e-liquid falls below AED 1 per millilitre. Importers and producers may therefore need to review:

• product classification and liquid volume;

• Excise Price calculations;

• product master data;

• customs and Excise Tax declarations;

• accounting and ERP settings;

• existing stock and inventory records; and

• internal tax procedures.

The FTA lists Cabinet Decision No. 137 of 2026 within its current Excise Tax legislation and confirms that it was issued on 24 July 2026 and became effective from 1 September 2026.

NUR Advisory Note

Businesses dealing with electronic smoking liquids should treat this as a tax-base and compliance change, rather than simply a pricing development.

The first step should be to identify which products fall within the definition of liquids used in electronic smoking devices and confirm their volume at product level. Businesses should then review whether the Excise Price currently used for each product complies with the AED 1 per millilitre minimum.

Particular attention should also be given to systems that calculate Excise Tax automatically. Where ERP, inventory or accounting software still applies the previous methodology without the new minimum threshold, tax calculations may need to be updated.

Companies should also ensure that internal documentation referring to the previous Cabinet Decision No. 55 of 2019 is updated, as that Decision has now been repealed.