Sugary drinks to be costlier in Saudi Arabia from December 1

RIYADH – All sugary drinks in the Kingdom will be costlier from December 1 as the General Authority of Zakat and Tax said a 50% selective tax would be levied on them. The tax is in line with the GCC Unified Agreement, Saudi Press Agency (SPA) said Tuesday.

Earlier the tax was implemented on soft drinks and energy drinks.

GAZT defined sugared drinks as any product in which any source of sugar or other sweeteners is added, to be taken as a drink, whether ready for drinking, or is in the form of a liquid concentrate, powder, gel, extract, or any form that is converted into a drink.

GAZT said health reports have warned against the negative results of consuming sweetened drinks. It stressed that such drinks can cause diseases, like diabetes and excessive obesity.

On the other hand, the consumer can substitute sugary drinks with fruits and fresh juices rich in vitamins beneficial to the body, the authority said.

GAZT said that the tax on selective commodities would not be imposed on sugared drinks containing at least 75 percent milk, in addition to drinks not containing added sugar but are naturally sweet, like fruit juice and drinks for special medical purposes.

GAZT has provided a scientific trip on its website gazt.gov.sa to simplify the concept of tax on selective commodities and the notion of sweetened drinks using diagrams and illustrations.

Saudi Arabia, the Arab world’s largest economy, already had a 100% tax on cigarettes and tobacco products, a 100% tax on energy drinks and a 50% one on fizzy drinks.

Saudi Arabia introduced a 5% value-added tax (VAT) in January 2018 to improve non-oil revenue generation after a plunge in oil prices from mid-2014 bruised its revenues.