Changes to sugar-based excise tax for sweetened drinks to take effect early 2026: Minister

The goal of the tax is to establish a policy that strikes a balance between maintaining public health and reducing sugar consumption, while also giving the industry space to innovate and develop products

Minister of Industry and Mineral Resources Bander Al-Khorayef revealed that the new tax policy on sugar for beverages will be implemented starting January 1, 2026, noting that the matter was one of the most prominent concerns brought up by industry players in recent periods and has now been resolved.

In an interview with Al Arabiya TV, the Minister clarified that addressing the sugar-based excise tax on sweetened drinks was a favorable negotiating experience with various entities, including the Ministry of Finance; the Zakat, Tax and Customs Authority (ZATCA); and the Ministry of Health.

Al-Khorayef stressed that the goal was to develop a policy that balances maintaining public health and reducing sugar consumption while also giving the industry room to innovate and develop products.

The changes to the tax policy came after achieving comprehensive consensus among all the relevant parties, said Al-Khorayef, noting that the matter was more complicated due to the need for coordination at the GCC level as well.

The industrial sector in Saudi Arabia, like the rest of the world, continues to face challenges due to numerous shifts and crises.

“I was an industrialist at some point, and I know the sector’s challenges never end, but the Kingdom has proven in recent years its full seriousness in cooperating with the private sector to overcome these challenges,” he said.

According to data available with Argaam, the GCC Financial and Economic Cooperation Committee approved in October 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.

Sweetened beverages are any products to which a source of sugar, artificial sweeteners, or other sweeteners have been added that are produced for consumption as a beverage. This includes beverages in all their forms, such as ready-to-drink beverages, concentrates, powders, gels, extracts, or any form that can be converted into a beverage.