Away from the Corporate Tax deadline, a change to excise tax took effect on 1 September 2026 that matters to any business dealing in tobacco or vaping products. A new Cabinet decision sets minimum prices used to calculate excise tax on cigarettes, water pipe tobacco, and the liquids used in electronic smoking devices. For importers, distributors, and retailers of these products, it changes the floor beneath the tax. Here is what Cabinet Decision No. 137 of 2026 does.
What excise tax is
Excise tax is a tax on specific goods considered harmful to health or the environment, including tobacco products and the liquids used in electronic smoking devices. It is charged as a percentage of a taxable price. To stop that price being understated, the framework sets minimum values the tax must be calculated on, and it is these minimums that the new decision updates.
The new minimum prices
Cabinet Decision No. 137 of 2026, effective from 1 September 2026, sets minimum excise prices below which the taxable value cannot fall. The excise price continues to be determined under the wider excise framework, but it may not drop below these floors.
| Product | Minimum excise price |
|---|---|
| Cigarettes (normal or electrically heated) | 0.4 dirham per cigarette |
| Water pipe tobacco, ready-to-use tobacco and similar | 0.1 dirham per gram |
Why a minimum price exists
The purpose of a minimum excise price is to protect the tax from being avoided through low declared prices. Without a floor, the taxable value, and so the tax, could be pushed down by understating what a product is worth. By fixing a minimum per cigarette and per gram, the decision ensures the excise tax on these products cannot fall below a set level regardless of the declared price. It is a floor, applied on top of the normal price rules.
The new figures are a floor, not a flat rate. The excise price is still worked out under the wider framework, but it cannot fall below 0.4 dirham per cigarette or 0.1 dirham per gram of water pipe tobacco.
Who needs to act
This is a targeted change. It affects businesses in the supply chain for tobacco and electronic smoking products: importers, stockpilers, distributors, and retailers who calculate and account for excise tax. For everyone else it is simply context. But for those in scope, the effective date of 1 September 2026 means the new floors apply now, and pricing and excise calculations should already reflect them.
What to do about it
If your business imports, distributes, or sells tobacco or electronic smoking products, check that your excise calculations use the new minimum prices from 1 September 2026: at least 0.4 dirham per cigarette and 0.1 dirham per gram of water pipe and similar tobacco. Update your pricing and systems so the taxable value never falls below these floors. It is a narrow change, but for the businesses it touches it is a live one, and getting the excise base wrong is exactly the kind of error a review looks for.
This article is general information and is not tax advice. The minimum prices are set by Cabinet Decision No. 137 of 2026, within the wider excise framework, and should be confirmed against the current text. We would be glad to help you apply the excise rules correctly.