Upon observing the recent public health landscape across the GCC, a visible shift can be noticed; governments have adopted excise taxes on carbonated and sugar-sweetened beverages (SSBs) to address high rates of obesity and diabetes and encourage healthier consumption and reformulation. Among adults, obesity in the region is among the world's highest; approximately 44.43% in Kuwait, 44.00% in Qatar, 42.45% in Saudi Arabia and 32.36% in the United Arab Emirates (UAE). The International Diabetes Federation reports very high diabetes burden across the GCC, these taxes compliment other measures such as, nutrition labelling, school food standards and marketing restrictions.
Saudi Arabia became the first country in the GCC to introduce an excise tax
The unified GCC excise tax approach is grounded in the 2017 GCC Unified Excise Tax Agreement and follows global recommendations from the World Health Organization (WHO). It shows how taxation, often viewed purely as a fiscal instrument, can be a strategic tool for long-term public health reform.
One of Saudi’s goals is to raise life expectancy from 74 to 80 years by 2030. To achieve this, the Health Sector Transformation Program focuses on prevention, better value for health care spending, and long term financial stability. The program uses the sugar tax as a tool to discourage excess sugar and encourage better product options to help Saudis live longer, healthier lives.
In June 2017, Saudi Arabia became the first country in the GCC to introduce an excise tax of 50% on carbonated drinks and 100% on energy drinks. By December 2019, the scope had been broadened to include all SSBs at a 50% rate. Guidance clarifies exclusions, e.g. sweetened beverages that contain 75% or more of milk/dairy products, in addition to beverages containing naturally present sugar such as natural fruit juices and special purpose medical beverages.
The UAE followed closely in October 2017
Enacting Federal Decree‑Law No. 7/2017 to manage excise taxes via the Federal Tax Authority. Initially, a 50% tax was imposed on carbonated beverages and 100% on energy drinks. Just like Saudi Arabia, the UAE also implemented a reform. From January 1, 2020, the tax extended to include all products with added sugar or sweeteners.
An innovative step is planned with the UAE’s announcement in July 2025 of its shift to a tiered excise system for SBBs, commencing in 2026. Under this model, SBBs will be taxed according to their sugar content per 100 ml, stepping away from the 50% flat rate that currently applies. This method of taxation encourages producers to reformulate to lower sugar levels and to produce healthier products. No details have yet been announced about the tiers and their taxation.
Other GCC states
Similar tax implementations have been rolled out in other GCC states, building on the GCC Unified Excise Taxes Agreement adopted in 2017 and implemented through each country’s national law. In line with the regional framework, Bahrain started to apply 50% excise tax on energy drinks in December 2017, and Qatar did so in 2019. Oman followed in October 2020 by adding 50% excise tax on SSBs. In Kuwait, meanwhile, no excise on SSBs is in force, but policy design is under discussion in broader health tax reforms.
Does it work ?
International experience shows that such taxes can work. For example, Mexico and California recorded clear declines in sugary drinks purchases after excise tax was applied to SSBs, while the UK's tiered levy led to reformulation and lower sugar sales. Still, excise taxes are not a standalone solution. The impact is stronger when supported by broader nutrition and health measures and public education.
By taxing sugary products, Gulf nations are exploring measures that support a future where health and policy intersect, reminding us that even taxes when well designed, can play a role in sweetening the future.