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Saudi Arabia is set to roll out a new sugar-based taxation system for sweetened beverages starting January 2026, replacing the existing flat-rate excise model.
According to the GCC Financial and Economic Cooperation Committee, the updated system will calculate excise tax based on the sugar content per 100 millilitres of a beverage. Drinks with higher sugar levels will face higher tax rates, ending the current 50% uniform excise tax on all sweetened beverages regardless of their sugar concentration.
In line with the GCC directive, the Zakat, Tax and Customs Authority (ZATCA) has published draft amendments to the Implementing Regulations of the Excise Goods Tax Law on the government’s consultation platform, Istitlaa. Citizens, importers, and manufacturers can share feedback until October 23.
The sugar-based taxation system will apply to all drinks containing added sugars or artificial sweeteners, including ready-to-drink beverages, concentrates, powders, syrups, and gels.
ZATCA stated that the move aims to motivate beverage manufacturers to reduce sugar content, encourage healthier consumer choices, and align with GCC initiatives to standardize excise tax mechanisms across member states. The authority will also organize awareness sessions and workshops to help businesses comply with the new regulations before implementation.
Once approved, the sugar-content-based model will take effect after all legislative processes are completed, marking a major policy shift toward health-focused taxation in the kingdom.
