The Gulf Cooperation Council (GCC) has approved a revised methodology for calculating excise tax on sweetened beverages, moving from a fixed-rate system to a tiered model based on total sugar content in each drink.
The decision replaces the current flat 50 per cent excise tax on all sweetened beverages, regardless of sugar concentration, with a volumetric approach that determines the tax rate according to the amount of sugar per 100 millilitres of beverage.
According to details confirmed by the Zakat, Tax and Customs Authority (ZATCA), the new methodology introduces four tax bands that will apply to sweetened beverages according to their total sugar content per 100 millilitres.
GCC sugar tax
The new system will be implemented in Saudi Arabia at the beginning of 2026, once all legislative and regulatory requirements are finalised.
| Tier | Sugar content (per 100ml) | Beverage type | Excise tax rate |
| Tier 1 | 0g (artificial sweeteners only, no added sugar) | Artificially sweetened drinks | SR0 per litre |
| Tier 2 | Less 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 more | High-sugar drinks | SR1.09 ($0.29) per litre |
The new system aligns the excise tax rate with each product’s actual sugar content, encouraging manufacturers to reduce sugar levels in beverages sold across the region.
Public consultation opened by ZATCA
Following the committee’s decision, ZATCA published proposed amendments to the Implementing Regulations of the Excise Goods Tax Law on the Public Consultation Platform “Istitlaa.”
The proposed amendments outline the provisions required to transition to the volumetric model, following approval by ZATCA’s Board of Directors to open the consultation process.
ZATCA has invited members of the public, manufacturers, and importers to submit feedback and suggestions by October 23.
Scope of the excise tax
The excise tax applies to all products containing added sugar, artificial sweeteners, or other sweetening agents intended for consumption as drinks.
The excise fee applies to ready-to-drink beverages and to concentrates, powders, gels, extracts, and other products that producers can convert into drinks.
All GCC member states will adopt the new sugar-based methodology, beginning with Saudi Arabia in early 2026, after they complete the necessary legislative and regulatory preparations.
The authority will conduct awareness workshops with relevant entities to explain the technical aspects of the new system and to ensure a smooth, well-informed rollout.
