Imagine reaching for your favorite sugary drink and realizing that it's not just the taste that's about to change. Yep, Saudi Arabia is shaking things up, and it's all about sugar. From January 1, 2026, the way excise tax is calculated on sweetened beverages will undergo a seismic shift. Instead of the familiar flat-rate system, the kingdom is rolling out a sugar-based, graduated method. It's a bold move, but what's the real story behind it?

The New Tax Rules

The Zakat, Tax and Customs Authority (ZATCA) isn't playing around. They've revised the regulations, and come 2026, these changes will kick in. This isn't just a tweak—it's a full-blown overhaul. The excise tax on sweetened beverages will now be determined by how much sugar is packed into every 100 millilitres of your drink. Those sugary delights will be sorted into tiers, and each tier will come with its own tax rate. This replaces the old system that slapped a flat 50% tax on the retail price of these beverages.

Defining Sweetened Beverages

What exactly falls under the sweetened beverage umbrella? It's pretty broad. If sugar or any sweeteners are added, and it's meant for you to drink, it's included. This means everything from ready-to-drink cans to powders and gels that you mix yourself. If it can be sipped, it's in the mix.

Why the Change?

Why the big switch? ZATCA says it's all about public health. They want to cut down on sugar consumption and push producers to bring healthier options to the table. It's a strategy that lines up with global best practices, aiming to push companies towards reformulating their products. The idea is simple: less sugar, less tax.

But there's a bigger picture here. This move aligns with the Gulf Cooperation Council's decision to adopt a similar tax model across its member states. It's a regional effort to tackle sugar consumption, and Saudi Arabia is leading the charge.

So, as we edge closer to 2026, beverage producers and importers might want to rethink their recipes. Consumers, on the other hand, might find themselves making healthier choices without even realizing it. It's a new era for sugary drinks in Saudi Arabia, and the stakes are high. Will it work? Only time will tell.