Kuwait approves GCC excise tax plan on harmful drinks
Cabinet backs new taxes on tobacco, energy drinks, and sugary beverages to boost revenue and health.
Kuwait’s Cabinet has approved a draft decree-law to adopt the Gulf Cooperation Council’s (GCC) Unified Excise Tax Agreement. This move will open the door to new taxes on tobacco products, energy drinks and sugary drinks. The aim is to reduce the use of products linked to health risks and increase non-oil revenue, with an estimated KD200 million expected each year.
The draft decree-law was approved during a Cabinet meeting on October 27, 2026, and has been referred to Emir Sheikh Meshal Al Ahmad Al Jaber Al Sabah for approval.
Proposed Tax Rates
Under the proposed rules, tobacco products and energy drinks will be taxed at 100 per cent. Carbonated drinks will face a 50 per cent excise tax, while sweetened drinks will have different tax rates based on their sugar content.
These proposed taxes are part of Kuwait’s plan to encourage healthier choices and reduce reliance on oil revenue.
GCC-Wide Tax Framework
The GCC Unified Excise Tax Agreement sets a common system for charging and collecting excise taxes across the six GCC countries. It also supports better tracking of taxable goods, unified tax rules and stronger economic cooperation in the region.
Under the agreement, the GCC Financial and Economic Cooperation Committee will decide which products are included in the tax system, set the tax rates and approve any future updates.
Implementation Date Yet to Be Announced
Even though the Cabinet has approved the draft law, Kuwait has not yet announced when the new taxes will start. The proposal still needs to go through the required approval steps before the implementation date is confirmed.
The new taxes may affect retail prices for consumers and could also impact businesses that import, produce or distribute the affected products. The final effect will depend on the approved regulations and how the market responds.
Kuwait’s step follows wider GCC efforts to align indirect tax policies, reduce the use of selected products and strengthen non-oil government income.
AI contributed to the creation of this article.