Saudi Arabia to impose tax on sweetened drinks from January 2026

Dubai: Saudi Arabia will impose a new tax system on sweetened beverages starting January 2026, marking a shift from the current flat-rate approach to a model based on sugar content.

The GCC’s Financial and Economic Cooperation Committee approved a revised methodology for calculating selective tax on sweetened drinks. Under the new tiered volumetric system, taxes will be determined by the amount of sugar per 100 millilitres of ready-to-drink beverages, with higher sugar levels attracting higher tax rates.

This replaces the existing 50 per cent excise tax on the retail price of all sweetened beverages, regardless of their sugar content.

In line with the GCC decision, Saudi Arabia’s Zakat, Tax and Customs Authority (ZATCA) has released proposed amendments to the Implementing Regulations of the Excise Goods Tax Law on the public consultation platform “Istitlaa”.

The draft outlines provisions for the transition to the new volumetric model, and the public has been invited to share feedback and suggestions until October 23.

The new framework applies to all beverages containing added sugars or artificial sweeteners, including ready-to-drink products, concentrates, powders, gels, or any item that can be turned into a drink.

According to ZATCA, the updated system aims to give importers and manufacturers ample time to prepare before implementation. The authority plans to hold awareness workshops with relevant bodies to clarify technical requirements and ensure a smooth transition.

The new model will be rolled out across GCC countries following the committee’s decision to unify excise tax calculations on sweetened beverages. In Saudi Arabia, the system is expected to take effect once all legislative and regulatory steps are completed.