GCC to impose heavy taxes on soft drinks, tobacco products

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Photo - americanbedu.com

Soft drink addicts would have to pay 50% more for their favourite beverage as authorities in the Gulf are pondering to impose a tax on these products, media reports suggested on Tuesday.

The proposed tax will hit tobacco users as well as they could end up paying an additional 50% tax. The Gulf state recent announced a 100% rise in cigarette prices that will come into effect from August.

Gulf Cooperation Council (GCC) health ministers proposed the 50% tax on both cigarettes at a recent meeting in Saudi Arabia. The proposal now lies with the GCC finance ministers and awaits their approval.

“Studies conducted recently by the GCC ministries of health showed that beverage prices in the region are the lowest in the world although it is a key factor in the spread of diabetes among children,” said Younus Al Khoury, undersecretary of the UAE ministry of finance.

“Hence, it recommended a 50% tax on selective soft drink products and a further 50% on tobacco, which is already subject to a 100% tax…the study recommends that the tax on tobacco should be 150% given the harmful effects of this product.”

Emarat Al Youm Arabic language daily quoted Al Khoury as saying that the proposal needs to be approved by each GCC nation before it comes into force. “I cannot give a date for the enforcement of these taxes as this depends on a reply by each GCC member,” he explained.

According to a recent official Arab study, the six-member GCC nations, which control over 40% of the world’s oil reserves, are among the world’s largest consumer of soft drinks and tobacco due to low prices of such products, high per capita income and lack of awareness.

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