All GCC states to implement soft drinks, tobacco tax by year-end

An excise tax on soft and energy drinks and tobacco products will be implemented across the Gulf Cooperation Council by the end of 2017, an official has been quoted as saying.

The director general of the UAE’s Federal Tax Authority (FTA) Khalid Ali Al Bustani confirmed the plans of the other Gulf states as the country prepares to implement the tax on Sunday, according to Gulf News.

Read: UAE to implement tobacco, soft drinks tax in October

The UAE is only the second Gulf state to implement the tax after Saudi Arabia did so in June. Oman, Kuwait, Bahrain and Qatar have yet to publicly announce when the tax will come into force.

Al Bustani warned shops, hotels and restaurants against hoarding ahead of the deadline following reports of similar practices ahead of implementation in Saudi Arabia.

Read: Saudi importers, wholesalers accused of hoarding as new tobacco tax comes into effect

The official said tobacco products, energy drinks and soft drinks stored before the deadline would still need to be registered and the tax of 100 per cent and 50 per cent respectively would need to be paid.

All registration of goods will be performed via the FTA’s website and companies must pay the tax within 15 days of the end of the month in which the import took place.

Al Bustani also dismissed fears that the excise tax would lead to the growth of the illicit market in the region due to different implementation dates in the Gulf countries.

He said there were adequate safeguards in place and all members would implement the tax by the end of the year.

Read: Taxing tobacco in the GCC

However, the official refused to disclose other product areas that could be affected by the tax, which was originally agreed by the Gulf member states to apply to goods deemed bad for human health and luxury products.

The maximum excise tax for any product is 200 per cent.