Saudi Arabia will introduce a new four-tier excise tax on sweetened beverages from January 1, 2025. The old flat 50 percent tax will be replaced by a system charging drinks according to their sugar content. The Zakat, Tax and Customs Authority (ZATCA) said this change is to reduce sugar intake and encourage healthier choices. Under the new system, drinks are sorted into four tiers: - Tier 1: Artificially sweetened drinks with no sugar. - Tier 2: Drinks with less than 5 grams of sugar per 100 ml. - Tier 3: Drinks with 5 to 7.99 grams of sugar per 100 ml. - Tier 4: Drinks with 8 grams or more of sugar per 100 ml. Higher sugar means higher taxes. This includes ready-to-drink beverages, concentrates, powders, gels, and extracts. ZATCA said, "The goal is to encourage producers and importers to offer lower-sugar beverages and promote healthier consumption patterns, following international best practices." This new system matches a Gulf Cooperation Council (GCC) plan to reduce sugar consumption by taxing drinks based on sugar content. Saudi Arabia’s move aims at cutting health risks linked to high sugar intake. Consumers may see prices rise for sugary drinks, while sugar-free or low-sugar drinks may cost less. Producers will likely reformulate products to avoid heavier taxes. This change shows Saudi Arabia’s firm stance on healthier living and public health. Meanwhile, the UAE will start a similar sugar-based beverage tax from January 1, 2026, joining the GCC effort to promote health and reduce sugar use in the region.