GCC adopts sugar-based excise tax system for sweetened drinks

The GCC Financial and Economic Cooperation Committee approved a new methodology for calculating the excise tax on sweetened beverages, basing it on the amount of sugar per 100 milliliters of the drink instead of the current flat rate of 50% of the retail price.

The new tiered volume-based approach sets progressive tax brackets according to total sugar content in ready-to-drink beverages.

Saudi Arabia’s Zakat, Tax and Customs Authority (ZATCA) launched a public consultation on amendments to the excise tax bylaws through its Istitlaa platform, open until October 23, 2025, before implementation of the new system in early 2026.

The measure aims to encourage sugar reduction in beverages and promote public health, while giving importers and manufacturers adequate preparation time. ZATCA said it will organize awareness workshops ahead of implementation.