The UAE’s excise tax, introduced in 2017 and managed by the Federal Tax Authority (FTA), targets goods harmful to health or the environment, including tobacco, energy drinks, carbonated beverages, and electronic smoking devices. A significant 2026 update introduced a tiered taxation system for sweetened drinks based on sugar concentration per 100ml. Businesses involved in producing, importing, or stockpiling these goods must register via the EmaraTax portal, maintain rigorous records for five years, and file monthly tax returns. Proper product classification and compliance are critical to avoid penalties, as excise tax is non-reclaimable and distinct from VAT.