Saudi Arabia has announced a major change to its tax policy on sweetened beverages, which will take effect in January 2026. The new system, approved by the GCC Economic Cooperation Committee, will shift from a flat 50% excise tax to a tiered model based on the amount of sugar per 100 milliliters. This means beverages with higher sugar content will be taxed at a higher rate.
The tax will apply broadly to all ready-to-drink beverages with added sugar or sweeteners, as well as to concentrates, powders, and gels that can be converted into a drink. The draft amendments to the Excise Goods Tax Law have been released for public consultation, with feedback accepted until October 23, after which the final regulations will be formalized.
This initiative is a key part of Saudi Arabia's public health strategy under its Vision 2030 framework, aiming to reduce sugar consumption and encourage healthier lifestyles. The Zakat, Tax and Customs Authority (ZATCA) has stated that importers and manufacturers will be given adequate preparation time and that awareness workshops will be conducted to ensure a smooth transition to the new tax system across all GCC countries.
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