UAE sets minimum selective price for tobacco and e‑liquids
UAE Ministry of Finance announces a minimum selective price for tobacco and e‑liquids; e‑liquids set at AED1 per ml, effective September 1, 2026, to strengthen tax compliance.
The Ministry of Finance has issued a decision establishing a minimum selective price for tobacco products and the liquids used in electronic smoking devices, the ministry said on Friday. The measure, which introduces a minimum of AED1 per millilitre for e‑liquids, is intended to improve the efficiency of selective tax collection and raise compliance across the sector. The rule will take effect on September 1, 2026, and builds on existing pricing floors for other tobacco categories.
Decision and implementation timeline
The Ministry of Finance published the decision setting the minimum selective price and specified that it will become enforceable from September 1, 2026. Officials said the move is part of ongoing efforts to refine the selective tax framework and ensure consistent application across evolving nicotine product categories. Businesses and stakeholders have been given time to prepare for the change before the implementation date.
New minimum for e‑liquids
Under the decision, a minimum selective price of AED1 per millilitre will apply to liquids used in electronic smoking devices and related tools. This establishes a per‑unit floor that retailers, importers and manufacturers must observe when pricing e‑liquids subject to the selective tax regime. The change aims to prevent pricing practices that could undermine the intended effect of the selective tax on consumption and public health objectives.
Products retained under existing minimums
The decision confirms continued application of minimum selective pricing to coils of cigarettes, shisha (Argilah) tobacco, ready‑to‑use tobacco and similar products. Those categories will remain subject to their established minimum price measures alongside the broader selective tax, which is set at 100% for all covered tobacco products. By harmonising the treatment of conventional and electronic tobacco items, the ministry seeks uniformity across product types.
Government rationale and compliance objectives
Officials framed the decision as necessary to “keep pace with market developments” and to close gaps that may allow tax avoidance or under‑reporting. The ministry said the measure will help standardise pricing practices and enhance the effectiveness of the selective tax system. Strengthening compliance was cited as a primary objective, with the price floor designed to reduce incentives for lowering declared values or packaging that sidesteps tax rules.
Expected impact on industry and consumers
Producers, importers and retailers of e‑liquids and other tobacco products are expected to review pricing, supply contracts and inventory ahead of the September 1, 2026 effective date. Some retailers may adjust retail margins or reformulate pack sizes to remain compliant while maintaining market competitiveness. Consumers could see price increases on lower‑priced e‑liquid products, particularly those previously sold at or below the new AED1 per ml threshold.
Enforcement measures and next steps for businesses
Enforcement will be carried out through existing tax administration and customs channels, the ministry indicated, with guidance to follow on implementation details and compliance checks. Businesses should update their invoicing, point‑of‑sale systems and product labelling to reflect the new minimum price where applicable. Industry stakeholders are advised to consult official ministry communications for technical guidance and to ensure timely alignment with the new requirements.
The Ministry of Finance’s move to set a minimum selective price for e‑liquids, alongside maintaining floors for traditional tobacco products, marks a notable expansion of the selective tax framework. With the AED1 per millilitre floor due to take effect on September 1, 2026, companies and consumers will have a clear timeline to adjust pricing and purchasing decisions as the UAE tightens measures to protect tax revenues and public health.