The Gulf Cooperation Council (GCC) has authorised a revised methodology for calculating excise tax on sweetened drinks, shifting from a fixed-rate system to a tiered mannequin based mostly on complete sugar content material in every drink.
The choice replaces the present flat 50 per cent excise tax on all sweetened drinks, no matter sugar focus, with a volumetric strategy that determines the tax price in line with the quantity of sugar per 100 millilitres of beverage.
In response to particulars confirmed by the Zakat, Tax and Customs Authority (ZATCA), the brand new methodology introduces 4 tax bands that may apply to sweetened drinks in line with their complete sugar content material per 100 millilitres.
GCC sugar tax
The brand new system shall be applied in Saudi Arabia originally of 2026, as soon as all legislative and regulatory necessities are finalised.
| Tier | Sugar content material (per 100ml) | Beverage kind | Excise tax price |
| Tier 1 | 0g (synthetic sweeteners solely, no added sugar) | Artificially sweetened drinks | SR0 per litre |
| Tier 2 | Lower than 5g | Low-sugar drinks | SR0 per litre |
| Tier 3 | 5g to 7.99g | Medium-sugar drinks | SR 0.79 ($0.22) per litre |
| Tier 4 | 8g or extra | Excessive-sugar drinks | SR1.09 ($0.29) per litre |
The brand new system aligns the excise tax price with every product’s precise sugar content material, encouraging producers to scale back sugar ranges in drinks bought throughout the area.
Public session opened by ZATCA
Following the committee’s choice, ZATCA revealed proposed amendments to the Implementing Laws of the Excise Items Tax Regulation on the Public Session Platform “Istitlaa.”
The proposed amendments define the provisions required to transition to the volumetric mannequin, following approval by ZATCA’s Board of Administrators to open the session course of.
ZATCA has invited members of the general public, producers, and importers to submit suggestions and options by October 23.
Scope of the excise tax
The excise tax applies to all merchandise containing added sugar, synthetic sweeteners, or different sweetening brokers meant for consumption as drinks.
The excise payment applies to ready-to-drink drinks and to concentrates, powders, gels, extracts, and different merchandise that producers can convert into drinks.
All GCC member states will undertake the brand new sugar-based methodology, starting with Saudi Arabia in early 2026, after they full the mandatory legislative and regulatory preparations.
The authority will conduct consciousness workshops with related entities to elucidate the technical elements of the brand new system and to make sure a easy, well-informed rollout.
