Saudi Arabia to Introduce Sugar-Based Tax Bands on Sweetened Beverages from January 2026

Saudi Arabia is set to implement a new tax system on sweetened beverages starting January 1, 2026, as part of its broader public health and fiscal reforms. The decision marks a significant shift from the current flat-rate tax structure to a sugar-content-based taxation system, aligning with global best practices aimed at curbing sugar consumption and promoting healthier lifestyles.

Under the new framework, sweetened beverages will be taxed based on the amount of sugar per 100 milliliters, rather than a uniform rate per volume. This means that drinks with higher sugar concentrations will face steeper taxes, while those with reduced or no added sugars will be taxed at a lower rate. The system will apply to all sweetened beverages, including ready-to-drink sodas, juices, and energy drinks, as well as concentrates, powders, and syrups that can be converted into drinks.

The Zakat, Tax and Customs Authority (ZATCA) has opened a public consultation to gather feedback on the proposed amendments to the Excise Goods Tax Law. Stakeholders, including beverage manufacturers, importers, and retailers, can submit their input through the Istitlaa platform until October 23, 2025. The feedback will help shape the final regulations, ensuring that the new system is both transparent and effective.

This move follows the Gulf Cooperation Council (GCC)’s decision to revise its methodology for calculating excise taxes on sweetened beverages. By adopting a volumetric and sugar-based approach, Saudi Arabia aims to encourage producers to reformulate products with lower sugar content, thereby reducing the prevalence of obesity, diabetes, and other lifestyle-related diseases in the region.

In preparation for the rollout, ZATCA is expected to conduct a series of awareness workshops and training sessions to help industry stakeholders adapt to the upcoming changes. These sessions will focus on compliance requirements, tax calculation methods, and transition procedures to ensure a smooth implementation process.

With this reform, Saudi Arabia joins a growing list of nations introducing sugar-content-based taxation to promote healthier consumer choices. The initiative reflects the Kingdom’s ongoing efforts to prioritize public health and support its Vision 2030 goals of improving quality of life, reducing healthcare costs, and encouraging sustainable development.