By Mohammed Al-Abdullah
Okaz/Saudi Gazette
DAMMAM — A 50 percent increase in the price of soft drinks is expected with the introduction of selective tax across six Gulf countries.
In February, the Saudi Cabinet approved the selective tax agreement which was given the go-ahead by the Gulf Cooperation Council (GCC) last year.
It was deiced to impose a selective tax of 100 percent on tobacco and its by-products as well as high-energy drinks and 50 percent tax on soft drinks.
Market sources told Okaz/Saudi Gazette that many companies have decided to put the tax burden on the shoulders of consumers.
Solaiman Al-Dohayan, deputy director of the Department of the Indirect Tax at the General Authority of Zakat and Income, said there was a general inclination among GCC countries to expand selective tax to cover all sweetened products.
He said that selective tax on sweetened products was not yet under discussion.
He said that consumers will shoulder the tax burden according to standard rates which would be agreed upon periodically among concerned GCC tax authorities.
He said the date for introducing selective tax will depend on a decision to be issued by finance ministers of the GCC member countries.
Speaking at a workshop in Dammam on Saturday, Dohayan underlined the importance of grace period given to soft drink companies before the application of selective tax because of a large consignment of soft drinks in their stores.
He asked the companies to inform the authorities of the quantities of energy and carbonated drinks they have in their stores.
Selective tax will be imposed on all imported goods from all countries, said Dohayan.
He said according to studies, the application of selective tax will be reflected on soft drink consumption which is expected to go down by 5-10 percent.
