Saudi Arabia to Introduce Sugar-Based Tax on Sweetened Drinks from January 2026

KSA, 18 October, 2025: Saudi Arabia will implement a new tax system on sweetened beverages starting January 2026, replacing the existing flat 50% excise tax with a tiered model based on sugar content.

The revised approach, approved by the GCC Financial and Economic Cooperation Committee, will calculate taxes according to the amount of sugar per 100 millilitres — with higher sugar levels attracting higher tax rates. This shift aligns with the broader GCC plan to unify excise tax calculations on sweetened drinks.

The Zakat, Tax and Customs Authority (ZATCA) has released draft amendments to the Excise Goods Tax Law on the public consultation platform Istitlaa, inviting feedback until October 23. The framework covers all beverages with added sugars or artificial sweeteners, including ready-to-drink products, concentrates, and powders.

ZATCA said the change aims to encourage manufacturers to reduce sugar content, promote healthier consumption, and give industry players sufficient time to prepare. Awareness workshops will also be held to ensure a smooth transition before the rollout.

Once all legislative procedures are complete, Saudi Arabia will join the UAE in implementing the volumetric sugar-based tax model — a major step toward aligning fiscal policy with public health and sustainability goals across the Gulf.