The General Authority of Zakat and Income Tax (GAZT) started on Sunday, Dec. 1, the application of a 50 percent selective tax on sugary drinks in the local market. However, some items of beverages that contain naturally added sugar such as natural fruit juices and special medicinal beverages have been exempted from the new taxes.
The selective tax on sweetened drinks was levied in line with implementation of the Unified Agreement of the Gulf Cooperation Council (GCC) states. The authority defined sugary drinks as any product in which any source of sugar or other sweeteners is added, to be taken as a drink, whether ready for drinking, or in the form of a liquid concentrate, powder, gel, extract, or any form that can be converted into a drink.
GAZT said health reports have warned against the negative results of consuming sweetened drinks. It stressed that such drinks can cause diseases like diabetes and excessive obesity. The consumer can substitute sugary drinks with fruit and fresh juices rich in vitamins beneficial to the body, the authority said.
GAZT said that the tax on selective commodities would not be imposed on sugary drinks containing at least 75 percent milk, in addition to drinks not containing added sugar but are naturally sweet, like fruit juice and drinks for special medical purposes. Saudi Arabia, already had a 100 percent tax on cigarettes and tobacco products, a 100 percent tax on energy drinks and a 50 percent one on fizzy drinks.
The following items are exempted from the selective tax, according to the authority.
1) Hundred percent natural fruit and vegetable juices to which no source of sugar or other sweeteners are added. These include mashed fruit, dried fruit juice, fruit powder juice, beverage made from fruit juice or vegetable juice that has not been added to any source of sugar or other sweeteners, beverages processed by mixing liquids, without adding any source of sugar or other sweeteners.
2) Milk and dairy products, including a drink containing at least 75 percent milk of the ready-to-drink content, a drink containing milk substitutes made from plant sources, such as soy syrup at least 75 percent of the ready-to-drink content, and infant formula or follow-up formula milk or infant foods, food made as a dietary alternative or diet foods used for special medical purposes.
3) Beverages and concentrates containing any added source of sugar or other sweeteners prepared by naturopathic persons for personal consumption or any other non-commercial purposes.
4) Beverages and concentrates intended for special dietary and medical uses, subject to the Gulf Technical Regulations for general requirements for packaged foods for special dietary uses, and the Gulf Technical Regulations for general requirements for the handling of foods used for special medical purposes.
5) Beverages containing any added source of sugar or other sweeteners, which are prepared in restaurants and similar places and served in an open, non-sealed container for the end consumers for direct consumption as a drink.
6) Milk-based beverages: The drink is classified as a milk-based beverage when it contains 75 percent milk from the ready-made beverage, and includes milk types such as animal milk, recycled milk, milk powder and yogurt.
7) Substitutes for milk: The beverage is classified as a substitute for milk if it meets all of the following conditions combined (contains 120 mg of calcium per 100 ml — extracted from legumes, grains, nuts, seeds or any other type of plant. It is used in all or most uses of milk and has a similar density of milk without including gas).
SOURCE : SAUDIGAZETTE
