Kuwait News Agency reported that the Council of Ministers endorsed the draft decree during its regular meeting chaired by Prime Minister Sheikh Ahmad Abdullah Al-Ahmad Al-Sabah. The approval covers the unified agreement for the selective tax across Gulf Cooperation Council states along with an attached amendment. Officials then forwarded the document to Amir Sheikh Mishal Al-Ahmad Al-Jaber Al-Sabah for ratification.
The unified GCC framework targets goods considered harmful to health and the environment, a Kuwait News Agency statement indicated. A KPMG tax note obtained by regional analysts outlined expected rates of 100 percent on tobacco products and energy drinks in addition to 50 percent on carbonated and sugar-sweetened beverages. The agreement allows member states to apply the tax as a percentage of value, a specific amount per unit or a combination of both.
Fitch Ratings projected in a September 2025 assessment that Kuwait would introduce the excise tax during the fiscal year ending March 2027. The agency estimated that the measure could generate revenue equivalent to 0.5 percent of gross domestic product or around 250 million Kuwaiti dinars annually once in force. Kuwait remains the only GCC country yet to activate the tax despite signing the original 2016 accord that Saudi Arabia, the United Arab Emirates, Bahrain, Qatar and Oman have already implemented.
PwC tax summaries confirm that no excise duties are currently collected at Kuwaiti borders or through domestic registration systems. The delay has left non-oil revenue averaging 8 percent of non-oil GDP between 2022 and 2024, below the GCC median of 10.2 percent according to Fitch Ratings data. Implementation would align Kuwait with regional peers that have used the levy both to curb consumption and to broaden their fiscal base.
A 2025 study cited by Al-Jarida newspaper projected that moderate excise rates on tobacco and sweetened drinks could yield between 639 million and 997 million dinars in cumulative revenue from 2025 through 2029 while reducing cigarette consumption by roughly 4 billion units and sweetened beverage intake by 220 million liters over the same period. The GCC Health Council compiled the underlying consumption statistics that informed those forecasts. Such outcomes would support public health objectives embedded in the unified agreement.
Businesses involved in importing or manufacturing the affected products will face registration, reporting and payment obligations once the domestic law and executive regulations take effect, a BDO Kuwait briefing from late 2024 noted. Transitional rules typically address stockpiling to prevent avoidance in the period immediately before launch. The Cabinet approval on Tuesday initiates the formal legislative process that will require subsequent parliamentary review before full activation.
