The Kingdom began imposing the excise tax in 2017, applying a 50 per cent levy on soft drinks and 100 per cent on energy drinks and tobacco.
Monday 20, May 2019
Saudi Arabia will expand an excise tax charged on tobacco and soda to include e-cigarettes and all drinks with added sugar as part of its efforts to boost non-oil revenue.
The General Authority of Zakat and Tax (GAZT) stated that sweetened drinks will be subject to a 50 per cent levy, while e-cigarettes and their liquids will face a 100 per cent tax.
The authority took the decision on 15 May and it became effective from 18 May after publication in the official gazette.
The world’s largest crude exporter has introduced several new taxes and fees over the past few years as part of Crown Prince Mohammed bin Salman’s economic transformation plan, which calls for boosting non-oil revenue.
Although crude still accounted for about two-thirds of the government’s earnings last year, non-oil revenue has been growing steadily. It jumped 46 per cent in the first quarter compared with the same period last year largely due to higher income from taxes on goods and services, including the excise levy.
Additionally, the government introduced a five per cent value-added tax (VAT) in January 2018.
The IMF last week said the VAT introduction had been successful, but the Saudis should consider raising the rate, which is low by global standards.