General Tax Authority Introduces Excise Tax on Sweetened Beverages

The General Tax Authority (GTA) has introduced a new Excise Tax mechanism on sweetened beverages, which will become effective on July 6, 2026. This tax will follow a Tiered Volumetric Model, calculating the applicable tax based on the amount of sugar or added sweeteners in taxable beverages and products.

According to the GTA's statement, the new mechanism is implemented under Law No. (2) of 2026, which amends certain provisions of the Excise Tax Law. These amendments extend the range of taxable goods to include sugar-sweetened drinks, such as soft drinks and juices with added sugar, as well as products that can be converted into beverages containing sugar or added sweeteners, including concentrates, powders, and extracts.

Taxpayers holding excise goods must submit a Transitional Declaration via the Dhareeba platform. If the total inventory is less than 200,000 liters, only a declaration is necessary, with no Excise Tax payable. However, if the inventory is 200,000 liters or more, an audited inventory report and applicable Excise Tax are required. The tax amount is determined not only by inventory volume but also by the sugar content of the beverages.

The GTA emphasized that Excise Tax is payable only on beverages with medium or high levels of added sugar, and the tax may be zero if all products fall within non-taxable categories. The tax applies solely to packaged products and does not include beverages prepared for immediate consumption that are supplied to consumers without sealed packaging.

The initiative is part of a broader effort to decrease the consumption of high-sugar products and encourage manufacturers to lower the sugar content in their products, thereby contributing to improved public health and enhanced quality of life.

Taxpayers are urged to submit their tax return through the Dhareeba platform within 90 days from July 6, 2026, and to pay any tax due within 30 days from the date of filing the return.