Special Tax to Tobacco and Sugary Drinks in Saudi Arabia - Saudi Expatriate

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Special Tax to Tobacco and Sugary Drinks in Saudi Arabia

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Kingdom of Saudi Arabia will impose a special tax on Sugary Drinks (Soft Drinks) and Tobacco from June 10 2017. This step is towards improving the budget deficit caused by low Oil prices.

Director of Tax unit of General Authority of Zakat and Tax informed that GCC have agreed to impose tax on Tobacco and Sugary Drinks in the kingdom and as per the rules covering the tax were published in the Official Gazette last week and would take 15 days to implement.

Special Tax to Tobacco and Sugary Drinks in Saudi Arabia-SaudiExpatriate.com

Since the inception of Tax in Saudi Arabia and Vision 2030 towards Saudization. Saudi Government expects a raise in tax from 8 Billion Saudi Riyals (SAR) to 10 Billion Saudi Riyals (SAR) yearly. This will comprise a 50% tax on Sugary Drinks and 100% on Tobacco and energy drinks.

Riyadh was very minimal when it comes to tax, but now as per the change in policy a series of taxes are levied by 2020 to close a budget deficit.

There are also plans to add VAT (value added Tax) of 5% from Net year January. Gulf Cooperation Council (GCC) have agreed to impose Tax on Tobacco and sugary drinks in coming months.

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