Minimum pricing has been introduced in the United Arab Emirates by the government with effect from Tuesday. This will enhance the country’s regulatory control over alternatives to nicotine delivery and strengthen the overall financial framework of the country. UAE Enforces Floor Price
The amended directive has provided that a minimum tax floor of AED 1 ($0.27) is imposed on every millilitre of liquid used in the electronic smoking machines and vapes. Although alternatives to nicotine products were subjected to the country’s excise system since 2019, this amendment has provided for a minimum pricing policy that is expected to prevent the availability of low prices in the market.
The Ministry of Finance initially detailed the upcoming measure on August 6 as part of comprehensive national efforts to harmonise taxation across evolving tobacco categories. By standardising pricing mechanisms across fast-growing market segments, regulators aim to bolster statutory compliance, minimise structural tax loopholes, and support the operational mandates of the Federal Tax Authority (FTA).
The nation applies a baseline 100 per cent excise duty rate on all recognised tobacco and vapour merchandise. Industry analysts highlight that establishing an absolute minimum cost per millilitre prevents regional importers, distributor networks, and retail vendors from utilising aggressive discounting strategies to subvert percentage-based duties. Under the revised rules, the excise tax will now be calculated based on either the fixed minimum amount or the retail baseline value, depending on which figure yields the higher total payable amount.
Beyond corporate compliance and revenue protection, the federal government consistently uses excise levies as a primary public health policy instrument. Raising the minimum entry cost for vaping supplies is intended to lower overall consumption rates, particularly among younger demographics and budget-conscious consumers, while aligning national commerce with long-term preventative health targets.
The Ministry has instructed all commercial importers, local manufacturers, and registered distributors of electronic smoking liquids to ensure their inventory management, supply chains, and retail invoicing fully reflect the new minimum pricing calculations. The Federal Tax Authority has also indicated that field inspections and digital tracking audits will be conducted across retail outlets nationwide to ensure strict adherence to the new pricing regulations and prevent non-compliant products from entering the consumer market. Dubai Financial Center
