Kuwait’s Cabinet approved a draft decree-law adopting the GCC Unified Excise Tax Agreement, proposing selective excise taxes of up to 100% on tobacco products and certain beverages.
Kuwait’s Cabinet approved a draft decree-law on 27 October 2026 to adopt the GCC Unified Excise Tax Agreement and its amendment, proposing new selective excise taxes on tobacco products and beverages. The draft was referred to Emir Sheikh Mishal Al-Ahmad Al-Jaber Al-Sabah for approval.
The proposed measures aim to discourage the consumption of products considered harmful to public health and the environment while diversifying government revenue through additional non-oil income. The excise tax is estimated to generate approximately KD200 million annually, according to a previous estimate by former Finance Minister Noura Al Fassam.
Tobacco products and energy drinks
Under the proposed framework, tobacco products and energy drinks would be subject to a selective excise tax of 100%. The measure is intended to discourage consumption of these products and address their potential impact on public health.
Carbonated and sweetened drinks
Carbonated beverages would attract a selective excise tax of 50%. Sweetened drinks would be taxed at variable rates determined by their sugar content, with higher sugar content potentially resulting in higher taxation.
GCC unified excise tax agreement
The GCC Unified Excise Tax Agreement establishes a common framework for imposing and collecting excise taxes across member states. It also provides for monitoring the movement of taxable goods and harmonising tax regulations among the six GCC countries.
Under the agreement, the GCC Financial and Economic Cooperation Committee is responsible for determining the goods subject to excise tax, setting applicable rates and approving subsequent amendments.
