Saudi Arabia to impose tax on harmful products in Q2-2017

Saudi Arabia is planning to impose selective taxes on tobacco, soft, and energy drinks in the second quarter of 2017 in order to achieve fiscal balance.

A tax of 100 percent will be levied on tobacco and byproducts, as well as energy beverages, while a 50 percent tax will also be applied to soft drinks.

The list of taxable products may also include harmful sugary beverages and food products that lead to obesity and diabetes.

The Saudi government, however, will not introduce its planned 5 percent value-added tax (VAT) before 2018, the program added.

In May 2016, the Gulf Cooperation Council countries proposed raising taxes on soft drinks by 100 percent as part of its uniform tax code.