Saudi Arabia is set to introduce a new sugar-based taxation system for sweetened beverages, effective January 2026, replacing the existing flat-rate tax model.
According to the GCC Financial and Economic Cooperation Committee, the updated framework 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, replacing the current 50% uniform excise tax applied to 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 public consultation platform, Istitlaa. Citizens, importers, and manufacturers can submit feedback until October 23.
The proposed 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 is intended to encourage manufacturers to reduce sugar levels, promote healthier consumer choices, and align with GCC efforts to standardize excise tax mechanisms across member states. The authority also plans to hold awareness sessions and workshops to help businesses meet the new compliance requirements before the law takes effect.
Once finalized, the sugar-content-based model will come into force after all legislative approvals are completed, officially launching a new era of health-driven taxation in the kingdom.