MPs have approved key amendment to the Gulf Co-operation Council (GCC) Unified Selective Tax Agreement, in a move aimed at modernising excise tax rules and strengthening regional economic integration.
The amendment, signed on June 1, 2025 and attached to Decree No (22) of 2026, revises core provisions of the original GCC excise tax framework, including how tax is calculated, defined and administered across member states.
At the heart of the amendment is a revised mechanism for calculating excise tax. Under the new framework, GCC states will have the authority to apply tax either as a percentage of value, a fixed amount per unit, or a hybrid model combining both methods.
The agreement also clarifies that the retail price used for tax calculation will exclude both value-added tax (VAT) and excise tax itself, a technical adjustment intended to improve pricing transparency and consistency.
One of the most notable policy shifts involves sweetened beverages, where taxation will increasingly be linked to sugar content rather than a fixed percentage model. According to the Finance and National Economy Ministry and the National Bureau for Revenue, this aligns with World Health Organisation recommendations aimed at reducing sugar consumption and improving public health outcomes.
Officials also confirmed that member states will now have greater autonomy in determining payment timelines and procedures for excise tax collection, giving governments more control over domestic implementation.
- Also approved by MPs is a move to expand global tax transparency framework with digital assets reporting overhaul.
A draft law allowing accession to the Annex of the Multilateral Competent Authority Agreement on the Automatic Exchange of Financial Account Information was approved and referred to the Shura Council.
- MPs have also recommended a mutual taxation agreement with Saudi Arabia.
- MPs also unanimously approved tougher penalties for illegal interference with agricultural drainage systems.
The approved amendments are to Decree-Law No (1) of 1985 regulating agricultural drains, introducing tougher fines and prison terms for violations such as blocking water channels, altering their course, constructing over them, or failing to comply with drainage instructions issued by the relevant authority.
Under the revised framework, offenders face fines ranging from BD1,000 to BD10,000 and imprisonment of no less than three months. Repeat violations will carry doubled penalties.
All the draft laws have been referred to the Shura Council with urgency for review.
&uuid=(email))