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Saudi Arabia’s cabinet on Monday agreed to implement the unified selective tax agreement that was previously approved by the six member states of the Gulf Cooperation Council (GCC).
The cabinet has authorized the minister of finance to set a timeline for the implementation of the new tax across the kingdom, state news agency SPA reported.
A selective tax of 100 percent will be imposed on tobacco and its byproducts, as well as energy beverages, while a 50 percent tax will be applied to soft drinks.
The GCC is also planning to levy a 5 percent value added tax by January 2018 in a region that has long enjoyed tax-free and heavily subsidized existence.
In Saudi Arabia, a royal decree has already been prepared for the imminent VAT, which will exempt basic food and other consumer items such as medicines and medical supplies.
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