Excise Tax Support for Sweetened Beverages
Stay Compliant with the New GCC Tax Reforms – Effective 2026
At RAQAM Consultancy, we help manufacturers, importers, and distributors navigate these evolving excise tax requirements with full regulatory, technical, and operational support.
In the GCC, excise tax applies to items such as:
- Energy drinks
- Carbonated and sweetened beverages
We support businesses across the GCC — including the
UAE, KSA, Bahrain, Oman, and Qatar
as the new excise tax takes effect, with Kuwait next in line.
Let’s Connect
What is Excise Tax?
Excise Tax, often referred to as a “sin tax,” is a form of indirect tax levied on specific goods considered harmful to public health or socially undesirable.
In November 2016, the member states of the Gulf Cooperation Council (GCC) agreed to implement excise tax on specific harmful goods such as tobacco, sugary beverages, and energy drinks, to encourage the reduction of their consumption.
All businesses that import, produce, or release excise goods from a designated zone must consider their registration requirements and compliance responsibilities related to filing and paying excise tax.
UAE: New Excise Tax Model (Effective January 2026)
In July 2025, the UAE Ministry of Finance (MOF) and the Federal Tax Authority (FTA) announced a major reform to the excise tax framework for sweetened beverages. Starting 1 January 2026, the UAE will move from the current ad-valorem (flat rate) system to a tiered volumetric model, linking excise rates directly to sugar content.
Key Highlights:
- More sugar = higher tax rate
- Carbonated drinks will no longer be a separate excise category
- Tax rates will depend on the total sugar per 100ml:
| Category | Sugar per 100ml | Expected Tax Tier |
|---|---|---|
| High sugar | ≥ 8g | Higher rate |
| Moderate sugar | 5–7.99g | Moderate rate |
| Low sugar | < 5g | Lower rate |
| Sugar-free (artificial sweeteners only) | 0g | 0% tax |
Exclusions:
- 100% natural fruit or vegetable juices (no added sugar)
- Infant formula, follow-up formula, and baby foods
- Milk and dairy products
- Beverages for medical or dietary use
- Non-commercial or homemade beverages
Saudi Arabia: Tiered System for Sweetened Beverages (Effective January 2026)
Saudi Arabia will adopt a similar sugar-based excise model starting January 2026, replacing the existing 50% flat tax. The Zakat, Tax, and Customs Authority (ZATCA) has announced four tax tiers:
| Tier | Sugar per 100ml | Tax Rate (SAR/Litre) |
|---|---|---|
| 1 | Sugar-free (artificial sweeteners only) | 0.00 |
| 2 | Low sugar (<5g) | 0.00 |
| 3 | Medium sugar (5–7.99g) | 0.79 |
| 4 | High sugar (≥8g) | 1.09 |
ZATCA has advised all manufacturers and importers to review product formulations, update ERP systems, and attend awareness sessions ahead of implementation.
Oman: Digital Tax Stamp Expansion (1st January 2026)
Oman’s Tax Authority has extended its Digital Tax Stamp (DTS) program to cover all beverages effective January 2026. The DTS system enhances traceability and compliance for excise goods, reducing illicit trade by digitally tracking products from factory to consumer.
Oman’s excise system — first introduced in 2019 — applies:
- 100% tax on tobacco, energy drinks, alcohol, and pork products
- 50% tax on carbonated beverages
Qatar, Bahrain, and Kuwait
Qatar: Excise tax remains unchanged (50% on carbonated drinks, 100% on tobacco and energy drinks). Expansion to sweetened beverages is under review.
Bahrain: Excise applies to tobacco, carbonated, and energy drinks. No rate changes announced for 2025.
Kuwait: No excise tax yet, but the Ministry of Finance has confirmed plans for a selective tax law aimed at generating non-oil revenue and discouraging unhealthy product consumption.
How We Can Support You
As regulatory experts across the GCC excise and product compliance landscape , RAQAM provides comprehensive end-to-end support for businesses impacted by the new sweetened beverage excise systems.
Portfolio Review & Reformulation
We audit sugar content across beverage portfolios and assess reformulation strategies to align with lower tax tiers.
Lab Testing & Certification Preparation
We coordinate accredited laboratory testing to certify sugar content and prepare compliance documentation.
ERP & Data Integration
We support technical teams to integrate excise tax logic, mapping SKUs to sugar categories for automated reporting and filing.
Documentation & Labelling Compliance
We ensure accurate sugar disclosures on product labels and maintain tax-compliant documentation for audits and verification.
Training & Change Management
We train regulatory and operations teams to understand the implications of the new excise framework, from tax filing to label updates.
Explore our other Services
Product Compliance
For a product to enter a market, it should comply to the regulations and conditions of the respective authorities.
Quality Assurance
We provide consultancy to help you achieve any quality-related certification
Regulatory Intelligence
To keep you posted with all changes that may occur in regulations, in the MENA region, and scientific findings.
Advocacy
The regulatory atmosphere is exponentially growing. If a crisis is encountered, we can help.
Do you have questions or inquiries?
We are here to help you
Contact Us for more information