Nicotine pouches are oral, non-tobacco products that deliver nicotine to the user. Typically, white and discrete, these pouches contain nicotine and other ingredients but do not include any form of tobacco. The nicotine used may be extracted from tobacco plants or synthesized. They are often described as a tobacco-free alternative to snus.
A wide variety of flavored pouches are available in the market, produced by both independent manufacturers and major global tobacco firms. For example:
- Swedish Match – Zyn, Volt
- British American Tobacco – Lyft, Velo
- Imperial Tobacco – ZoneX
- Japan Tobacco International – Nordic Spirit
- Philip Morris International – Shiro
- Altria – On!
UAE Excise Tax and Classification under GCC Customs Tariff
According to Article 2 of UAE Cabinet Decision No. 52 of 4 August 2019, excise tax applies to the following categories:
- Tobacco and tobacco products
- Liquids used in electronic smoking devices and tools
- Electronic smoking devices and tools
At first glance, nicotine pouches do not appear to fall under any of these categories:
- They do not contain tobacco,
- They are solid, not liquid, and
- They are not devices or tools for smoking.
However, Article 3 of the same Decision broadens the definition of “tobacco and tobacco products” by stating: ‘For the purposes of Article 2 of this Decision, tobacco and tobacco products shall include all items listed within Schedule 24 of the GCC Common Customs Tariff...’
The Harmonized System (HS) code used for nicotine pouches is 24 04 91 30 00, which is part of Chapter 24 of the GCC Customs Tariff. This chapter covers ‘Tobacco and manufactured tobacco substitutes; products, whether or not containing nicotine, intended for inhalation without combustion; other nicotine-containing products intended for the intake of nicotine into the human body’.
Therefore, nicotine pouches, although neither tobacco not tobacco product, are classified under Chapter 24.
Practice vs. Textual Interpretation
Despite the apparent mismatch with the literal categories in Article 2, over 400 pouch products are currently listed in the UAE's excise goods database, each subject to a 100% excise rate.
This reflects a policy approach grounded in the functionality and health impact of the product, not just its literal components. Regulators arguably apply a substance-over-form rationale taxing products that deliver nicotine to the human body in a consumable form, regardless of whether they contain tobacco.
This is consistent with the public health goals of excise taxation: deterring harmful or addictive consumption rather than only targeting specific materials like tobacco.
The Ambiguity in Articles 3 and 4
There remains a textual tension in the interpretation of Cabinet Decision No. 52/2019 and its implementing regulation:
- Article 4 empowers the Ministry of Finance to specify customs codes for e-liquids used in electronic smoking devices.
- UAE Ministerial Decision No. 1 of 3 January 2025 clarifies that applicable HS codes for e-liquids are also found in Chapter 24.
This creates an overlap: e-liquids are covered both as “liquids” under Article 4 and “tobacco products” under Article 3, leading to potential duplication or overreach. The reason behind this could be that Article 3 requires a narrow interpretation, i.e. it might suggest that only items containing tobacco are intended to be taken from Chapter 24. If that were the case, special provisions (like Article 4 for e-liquids) would be necessary to bring other Chapter 24 products (like pouches) within scope.
This narrow interpretation helps explain why Article 4 of Cabinet Decision No. 52/2019, when read in conjunction with Article 1 of Ministerial Decision No. 1/2025, specifically addresses e-liquids—even though they also fall under Chapter 24 of the GCC Customs Tariff. This indicates that not all items in Chapter 24 are automatically subject to excise, and that certain non-tobacco products, like e-liquids, require express regulatory inclusion to fall within the scope of taxation.
On this basis, one may argue that solid, non-tobacco, nicotine-containing products which:
- Do not contain tobacco, and
- Are not in liquid form, and
- Are not integrated into or sold as part of electronic smoking devices or tools,
should not be subject to excise tax in the UAE under the current legal framework.
Tobacco-free nicotine pouches satisfy all these conditions.
Yet in practice, such pouches are routinely taxed at a 100% excise rate, and the UAE’s excise goods database lists over 400 registered pouch products. This presents a discrepancy between the apparent scope of the law and its actual implementation.
To resolve this ambiguity and reduce legal uncertainty, it might make sense to consider amending Cabinet Decision No. 52/2019 to to clarify the treatment of nicotine pouches and prevent potential future claims for excise refunds or instances of non-payment.
The disclaimer
Pursuant to the MoF’s press-release issued on 19 May 2023 “a number of posts circulating on social media and other platforms that are issued by private parties, contain inaccurate and unreliable interpretations and analyses of Corporate Tax”.
The Ministry issued a reminder that official sources of information on Federal Taxes in the UAE are the MoF and FTA only. Therefore, analyses that are not based on official publications by the MoF and FTA, or have not been commissioned by them, are unreliable and may contain misleading interpretations of the law. See the full press release here.
You should factor this in when dealing with this article as well. It is not commissioned by the MoF or FTA. The interpretation, conclusions, proposals, surmises, guesswork, etc., it comprises have the status of the author’s opinion only. Furthermore, it is not legal or tax advice. Like any human job, it may contain inaccuracies and mistakes that I have tried my best to avoid. If you find any inaccuracies or errors, please let me know so that I can make corrections.
