The Saudi Zakat, Tax, and Customs Authority will begin implementing the amendments to the executive regulations of the selective tax starting Thursday, January 1, 2026.
The amendments aim to develop a methodology for calculating tax on sweetened beverages by transitioning from a fixed rate to a methodology based on the total sugar content in the product.
The new methodology will be applied through graduated tax brackets linked to the sugar level per 100 ml of the beverage, contributing to public health enhancement, encouraging consumers to reduce sugar consumption, and urging manufacturers and importers to offer products with lower sugar content in line with the best international practices adopted in this field.
This new methodology replaces the current approach to imposing the selective tax on sweetened beverages, which is based on a fixed rate of 50% calculated from the retail price of the taxable sweetened drink.
Sweetened beverages refer to any product to which a source of sugar or other sweeteners is added, produced for consumption as a beverage, including various forms such as ready-to-drink beverages, concentrates, powders, gels, extracts, or any other form that can be converted into a beverage.
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A balance between health and product development
Minister of Industry Bandar Al-Kharif had confirmed in earlier statements that the new tax policy on sugar in beverages would be implemented from January 1, 2026, noting that this file was one of the most prominent issues raised by industrialists in the past period and was resolved. Dealing with the sugar tax file on beverages was a good experience in negotiating between various parties, including the Ministry of Finance, the Zakat, Tax and Customs Authority, and the Ministry of Health.
Al-Kharif emphasized that the goal was to establish a policy that balances public health preservation and sugar consumption reduction with allowing the industry room for innovation and product development.
