Saudi Gazette report
RIYADH — The Shoura Council on Wednesday started deliberations on the report of its finance committee with regard to the draft selective tax law.
The draft law was prepared following an agreement reached among Gulf Cooperation Council (GCC) states allowing each member to prepare its own law for selective tax.
Earlier, the Council of Ministers decided to introduce a selective tax on luxury items and products that are harmful to human health and the environment on the basis of a GCC summit decision in this respect. In February, the Cabinet authorized the minister of finance to fix the date for imposing the tax in the Kingdom, the Saudi Press Agency reported.
Yahya Al-Samaan, assistant president of the Council, said the finance committee urged the Council to approve the draft law, which was prepared in line with the GCC agreement.
The draft law consists of 30 articles that give flexibility in introducing selective tax and determining the procedural rules related to taxation in free zones and duty-free shops.
The law aims at imposing a selective tax with the objective of reducing the consumption of goods that are harmful to health, especially for children and the youth, as well as to contain diseases caused by derivatives of tobacco, and carbonated and energy drinks.
On the economic perspective, the law aims at encouraging members of society to increase the consumption of healthy products.
The government’s target is to spend the revenue from the tax for development projects as well as for implementing useful programs like the treatment of diseases caused by harmful products. Taking part in the deliberations, Council members wanted to include in the draft the details of maximum taxes for each product that comes in the purview of the tax.
Another member asked how it would be possible to synchronize a selective tax and a value added tax, which is set to be introduced in all GCC states from the beginning of next year.