Wednesday, December 31, 2025
Saudi Arabia Introduces New 4-Tier Excise Tax on Sweetened Beverages Starting January 1
The Saudi Zakat, Tax and Customs Authority (ZATCA) will introduce a new four-tier excise tax system for sweetened beverages starting Wednesday, January 1. This new system replaces the current flat 50% excise tax and instead calculates tax based on the amount of sugar per 100 milliliters of the beverage.
Drinks will be taxed according to their sugar content: more sugar, higher tax; less or no sugar, lower or no tax. This measure aims to enhance public health by reducing sugar intake, in line with health programs throughout the GCC.
Approved Changes to Excise Tax Regulations
The ZATCA Board of Directors has approved amendments to parts of the Executive Regulations of the Excise Goods Tax Law. These changes update how excise tax is calculated for sweetened beverages, making the total sugar content the main factor instead of retail price. Trending: Saudi court sentences 11 defendants to 155 years for major fraud network
How the New Tiered Tax System Works
ZATCA said that the new excise tax is based on a tiered bracket system that figures out how much tax to charge based on how much sugar is in 100 ml of a ready-to-drink sweetened drink.
The four tax brackets are
➤ First bracket: Beverages sweetened only with artificial sweeteners and no added sugar.
➤ Second bracket: Low-sugar beverages containing less than 5 grams of sugar per 100 ml.
➤ Third bracket: Medium-sugar beverages with 5 to 7.99 grams of sugar per 100 ml.
➤ Fourth bracket: High-sugar beverages with 8 grams or more of sugar per 100 ml.
What Counts as a Sweetened Beverage?
ZATCA made it clear that any product meant for use as a drink that contains added sugar or sweeteners is considered a sweetened beverage. All forms are covered by this:
🔘 Ready-to-drink beverages
🔘 Concentrates
🔘 Powders
🔘 Gels
🔘 Extracts
🔘 Any other form that can be converted into a beverage. Most Viewed: Saudi Arabia arrests 5 expats in Asir region on charges of prostitution
Public Health and GCC Alignment
The authority stressed that the new sugar-based excise tax is designed to promote healthier choices and encourage manufacturers and importers to reduce sugar levels in their products. This approach follows international best practices and supports public health goals.
The new tax system is based on a decision by the GCC Financial and Economic Cooperation Committee, which agreed to move toward a volumetric, tiered excise tax system based on sugar concentration across the region.
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| Saudi Arabia Introduces New 4-Tier Excise Tax on Sweetened Beverages Starting January 1 |
