The news is this: last week, the UAE and Saudi Arabia announced that, starting January 1, 2026, the tax system on sugary drinks will change. Shortly after, the GCC Financial and Economic Cooperation Committee approved a new methodology for calculating excise tax across the region.

The idea is simple: the more sugar a drink contains, the higher the tax manufacturers will pay — and the more that drink will cost on the shelf.

But what does this actually mean for us? Why are these initiatives being introduced, and how have similar policies worked in other countries? Let’s take a closer look.

To understand why this change is such a big deal, we first need to look at how the tax works today.

At the moment, all sugary drinks — no matter how much sugar they contain or what kind of drink they are — are taxed at a flat 50%. And while the system is easy enough to apply, it leaves little room for nuance. Manufacturers have no real incentive to cut down on sugar, and consumers have no reason to choose one drink over another — a cola zero and a cola packed with sugar will set you back exactly the same.

So what is changing?

From 1 January 2026, the tax will depend on the amount of sugar per 100 ml. The more sugar a drink contains, the higher the tax — and on the flip side, the less sugar it has, the lower (or even zero) the tax.

Under the new UAE excise rules, manufacturers will need to provide lab reports showing the sugar or sweetener content per 100 ml to determine which tax band a drink falls into. If no lab report is submitted, the drink will automatically be classified in the high-sugar bracket.

Yes — and we are pretty confident about that, because this kind of tax is nothing new. It has already proved its worth in plenty of other places.

The United Kingdom and South Africa brought it in back in 2018, Portugal went first in 2017, and Morocco joined a couple of years later in 2019. And the results didn’t take long to show. In the UK, the average sugar content in soft drinks dropped by 46% in just two years, with more than half of producers tweaking their recipes to stay below the taxable limit. In Portugal, sales of soft drinks fell by 15–20%, and in South Africa, people bought around 30% fewer sugary drinks once the tax kicked in.

So the question naturally follows — if it works so well, why did it take the GCC this long to do the same? The answer, as it turns out, is just as straightforward as the question.

In short — because drinks are the easiest, and most effective, place to start. But let me give you a few more reasons.

The problem of obesity and diabetes is truly a global one — and it calls for quick, effective action. According to official data from the World Health Organization, in 2022 around 830 million people worldwide were living with diabetes, while about 2.5 billion adults were overweight — including over 890 million who were obese. In other words, roughly 43% of adults globally are now above a healthy weight.

So, what are other countries doing about it?

Labelling

In the United States, since 2020, it is been mandatory for all packaged foods to list “Added Sugars” separately on the Nutrition Facts label — a small but powerful change that makes sugar content impossible to hide.

Chile, however, went even further. Its food-labelling law introduced bold, front-of-pack warning symbols on products high in sugar, salt, or saturated fat — a literal stop sign for unhealthy choices. The model has since spread across Latin America.

Portion controls

Do you remember those days when you would buy a drink “with refills” and just keep topping it up endlessly? (I definitely do — mine was Burger King after school!) Well, France has put an end to that. Restaurants, cafeterias, and schools are now banned from offering unlimited refills of sugary drinks.

Even big corporations are joining in. Mars, the company behind our beloved Snickers bars, has voluntarily pledged to make portion control part of its public-health strategy — introducing “fun-size” bars and clearer calorie information on front-of-pack labels.

Protecting children

Our sugar obsessions usually start in childhood — which is why restrictions aimed at children make so much sense in the long run. In the United States, the Healthy, Hunger-Free Kids Act (2010) banned the sale of high-sugar snacks and drinks in schools.

Chile again leads by example here — banning the advertising of unhealthy foods to children under the age of 14.

Taxes on ultra-processed foods

Finally, one of the boldest steps comes from Colombia, whose “Junk Food Law” (2021) introduced extra taxation not just on sugary drinks, but also on ultra-processed foods high in sugar, salt, and saturated fat. It is a move that several other countries are now starting to follow.