Riyadh: Saudi Arabia will change how it taxes sweetened beverages from January 1, 2026, with the levy to be calculated based on the amount of sugar in each product rather than a flat rate on retail prices, the Zakat, Tax, and Customs Authority (ZATCA) has announced, reports Arab News.
Under the new system, tax rates will vary according to the sugar content per 100 millilitres of ready-to-drink beverages. Drinks with higher sugar levels will attract higher taxes, while products with lower sugar content will face reduced rates.
The new rules will apply to all types of sweetened beverages, including ready-to-drink products as well as concentrates, powders, gels and extracts intended for consumption.
ZATCA said the change is aimed at improving public health by guiding consumers toward lower-sugar choices. By tying taxes directly to sugar levels, the authority expects producers and importers to lower the sugar content in their products, in line with global practices.
The decision follows a recommendation by the Financial and Economic Cooperation Committee of the Gulf Cooperation Council, which advised member countries to adopt a sugar-based method for taxing sweetened beverages across the region.
The move is part of Saudi Arabia’s wider efforts to encourage healthier consumption habits and reduce overall sugar intake among residents.
