Will Bahrain follow the Kingdom of Saudi Arabia (KSA) and the United Arab Emirates (UAE) in imposing and expanding the excise tax?
KSA and UAE charged excise tax on sweetened drinks and sweets, of which sugar forms more than 75% of ingredients since last December. The decision, in KSA and UAE, included soda, electronic cigarettes and all drinks with added sugar as part of its efforts to boost non-oil revenue.
According to according official documents issued by the tax authority in KSA, sweetened drinks will be subject to a 50% levy, while e-cigarettes and their liquids will face a 100% tax. The date of implementation hasn’t been determined yet.
The General Authority for Zakat and Income Tax in KSA said that the implementation came in accordance with the decision of the unified agreement for the excise tax of the Gulf Cooperation Council (GCC) countries. It is understood that Bahrain is part of this agreement and applied along with KSA and UAE the excise tax in the beginning of the year 2018 on soft drinks by 50% and on energy drinks and tobacco and its derivatives by 100%.
In an official statement, the General Authority for Zakat and Income Tax in KSA stated that sweetened drinks are any product to which any sugar source or other sweetener is added, which is produced for the purpose of drinking as a drink, whether it is ready for drinking, concentrated liquids, powders, or is a gel, extracts, or any Image can be converted into a drink. The authority indicated that the selective commodity tax will not be applied to sweetened drinks that contain milk and its derivatives by 75% or more, in addition to drinks that contain sugar that is not naturally added, such as natural fruit juices and drinks with special medical purposes.
On the other hand, health reports indicated the negative results of excessive consumption of sweetened drinks, confirming that they would expose the consumer to a number of diseases such as diabetes and obesity, and the consumer could replace sweetened drinks with fruits and natural juices rich in vitamins beneficial to the body.