Saudi selective tax rollout said to be postponed

Saudi Arabia’s plans to impose selective taxes on tobacco, soft, and energy drinks from April 1 may be delayed, Alriyadh newspaper reported, citing unnamed sources.

The delay was attributed to obtaining the required regulatory approvals.

Last month, Saudi Arabia’s cabinet agreed to implement the unified selective tax agreement that was previously approved by the six member states of the Gulf Cooperation Council (GCC).

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

Saudi Arabia and its fellow Gulf nations are also planning to levy a 5 percent value added tax (VAT) by January 2018, in a region that has long enjoyed a tax-free and heavily subsidized existence.

A royal decree has already been prepared in the kingdom for the imminent VAT, which will exempt basic food and other consumer items such as medicines and medical supplies.