Saudi Arabia to place hefty tax on Soft drinks, Energy drinks amidst dwindling oil revenue
Saudi Arabia has announced that it will place a 50% levy on sweetened beverages such as soft drinks and a 100% tax on energy drinks and cigarettes as it looks to boost revenue amid falling oil prices.
The new taxes were first proposed by the Gulf Cooperation Council (GCC) last December, but Saudi Arabia recently signed the agreement.
The country said that the increases are part of an “excise tax on harmful products”. The taxes will come into effect in April 2017.
In addition to the new excise tax, soft drinks and energy drinks will be slapped with an additional 5% value added tax (VAT) from next year.
Saudi Arabia’s Programme 2020 document states that the Kingdom aims to combat obesity and diabetes among its population, particularly children through such taxes.