Saudi cabinet approves GCC selective tax

The Saudi cabinet approved on Monday the selective tax agreement which was given the go-ahead by the Gulf Cooperation Council (GCC) last year to be imposed uniformly across its six member states. The cabinet has also decided to delegate Finance Minister Mohammed Jadaan to set the date for the introduction of the tax in the kingdom, the SPA state news agency has reported.

Last month, the ministry of finance suggested that the tax will be introduced in April. A selective tax of 100 per cent will be imposed on tobacco and its by-products, as well as high energy drinks. Ordinary soft drinks, meanwhile, will carry a 50 per cent tax.

The GCC countries are introducing such taxes to boost government revenues which have reduced as a result of falling oil prices, the bloc’s main source of income. Saudi Arabia; the largest oil exporter in the world, has suffered from the sharp decline in financial revenues as a result of the decline in crude oil prices since 2014.