50% selective tax on sweetened beverages from December 1 in Saudi

Accordingly 50 percent selective tax will be imposed on sweetened beverages effective from December 1 this year.

GAZT has recently approved amendments in its selective tax regulations to include sweetened drinks as well as electronic smoking devices and their liquids.

According to the amended regulations, a selective tax of 100 percent will be imposed on tobacco and its byproducts, electronic smoking tools and their liquids, as well as energy beverages, while a 50 percent tax will be applied to soft drinks and sweetened drinks.

The GCC had earlier decided to impose selective tax on soft carbonate drinks and energy drinks and later to include sweetened beverages that are harmful to health under the unified GCC selective tax agreement.

The tax system for these beverages will be 50 percent of the retail price for the final consumer beginning from December 1, which will be applied by the GCC countries.

GAZT said that sweetened beverages include any product added to it sugar sources or other sweeteners that are produced in the form of ready-to-use drink, concentrate, powders, gel, extracts or in any other form that can be converted into a drink. The authority noted that the health reports pointed to the negative results of the consumption of such beverages, stressing that the consumers are exposed to a number of diseases and weight gain, and they can replace canned beverages and sweetened drinks with fruits and natural juices rich in vitamins and that are beneficial for the health.

GAZT confirmed that the selective tax will not be applied to sweetened beverages containing milk at a rate not less than 75 percent of the content of the ready-to-use drink, as well as milk and milk formulas, in addition to natural fruit drinks without additives. GCC states implemented selective tax on tobacco and energy drinks at various dates while the tax came into being in the Kingdom from 11 June 2017.