Saudi says soft drink, tobacco tax yet to be implemented

Saudi Arabia’s Ministry of Finance has said it has not yet implemented a new tax on soft drinks, energy drinks and tobacco.

In a statement carried by Saudi Press Agency, the ministry said it had not yet applied the tax and would not do so until the procedures had been ratified.

The measures will be “in accordance with the resolutions of the Supreme Council for leaders of GCC in the 36th session which was held in December 2015 and the 37th Session held in December 2016,” according to the statement.

The earliest date for the implementation is expected to be April 2017.

The Fiscal Balance Program 2020 report, published by the Saudi government in December, said the kingdom would introduce a 50 per cent tax on soft drinks and a 100 per cent tax on tobacco and energy drinks.

The taxes were originally proposed by the Gulf Cooperation Council in December 2015 but only signed by the finance ministry at the end of last year.

No other Gulf States have announced when they will introduce the taxes.

Low price soft drinks have been partly blamed for the rise of obesity and diabetes in the Gulf region.

Read: Counting the cost of type 2 diabetes on the UAE’s medical system

In November, the World Health Organisation encouraged the taxing of sugary drinks to lower consumption and reduce obesity, type 2 diabetes and tooth decay.

Reports in April suggested restaurants serving soft drinks and energy drinks in Saudi Arabia would be fined under new Ministry of Health legislation.

Read: Saudi to fine restaurants serving soft drinks