Cigarettes and Soft-Drinks Taxes to Rise in Saudi Arabia

January 6, 2017 Taxation in Saudi Arabia

Cigarettes in Saudi ArabiaRIYADH – Prices of cigarettes in Saudi Arabia could double by April 2017, as the government sets out to enact heavy new taxes on selected goods.

According to new information released by the official news of Saudi Arabia, the Saudi News Agency, the government has not yet implemented its highly punitive tax on tobacco and soft drinks.

The government plans to introduce a tax of 50 percent on the sale of all soft drinks sold in the country, with a raised tax of 100 percent if the drink is considered to be an “energy drink”.

Further, the government wants to levy a tax of 100 percent on the sale of tobacco products.

The taxes were first proposed in December 2015 during a meeting of the Gulf Cooperation Council, and were signed into law by the government of Saudi Arabia in late 2016.

However, the taxes have not yet been ratified, and, according to the Saudi News Agency, will not be until a thorough ratification and implementation process is established.

It is expected that all necessary steps to enact the tax may be ready by April 2017.

Currently no other Gulf nation has signed the proposed taxes into law.