Saudi Arabia’s Shoura Council began deliberations on Wednesday on a draft selective tax law that would increase the cost of tobacco, soft drinks and other unhealthy products.
The tax, which will also cover some luxury items, is being implemented by all the GCC nations although it is believed to be up to each country to determine the exact rates.
In February, the kingdom’s cabinet approved the finance minister to set a date for the tax’s introduction.
The finance committee urged the Shoura Council to approve the draft law, which consists of 30 articles, assistant president Yahya Al Samaan was quoted as saying.
Gulf countries are expected to use the tax to fund development projects with UAE minister of state for financial affairs, Obaid Al Tayer, saying in March the tax could generate Dhs2bn ($544.5m) a year from tobacco alone.
Qatar’s cabinet also approved a draft law relating to the tax in February, which will be “imposed on goods harmful to human health and the environment, and the luxury goods produced domestically or imported and set forth in the table attached to the law”.
Following this, the country’s only alcohol shop encouraged licence holders to stock up last month in anticipation of price increases.
Low prices of soft drinks and junk food have been blamed for rising rates of diabetes and obesity across the Gulf region.
One recent study in Qatar showed 70 per cent of citizens and long-term residents were overweight or obese.