Saudi Arabia to impose tax on tobacco, sugary drinks on June 10

The GCC have agreed to impose the tax on tobacco. (AFP)
Updated 28 May 2017
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Saudi Arabia to impose tax on tobacco, sugary drinks on June 10

DUBAI: Saudi Arabia will impose a special tax on tobacco and sugary drinks on June 10, as part of a series of steps toward closing a budget deficit caused by low oil prices.
Khalid Khurais, director of the selective tax unit of the General Authority of Zakat and Tax, told Al-Arabiya television on Sunday that rules covering the tax were published in the official gazette last week and would take effect after 15 days.
Officials have said they expect to raise between SR8 billion and SR10 billion ($2.1 billion to $2.7 billion) annually from the tax, which will comprise a 50 percent levy on soft drinks and 100 percent on tobacco and energy drinks.
The tax marks a big change in policy for Riyadh, which has traditionally kept taxation minimal but now plans a series of levies and fees by 2020 to close a budget gap that totaled SR297 billion last year. Next January it plans to impose a 5 percent value-added tax (VAT), a much bigger revenue-generating step.
The other countries in the six-nation Gulf Cooperation Council (GCC) have also agreed to impose the tax on tobacco and sugary drinks, and are expected to do so in coming months.


For Iranians, economic crisis looms larger than US tensions

Updated 19 May 2019
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For Iranians, economic crisis looms larger than US tensions

  • Iran’s 80 million people struggle to buy meat, medicine and other staples of daily life
  • Many pointed to the economy, not the possible outbreak of war

TEHRAN: Across Iran’s capital, the talk always seems to come back to how things may get worse.
Battered by US sanctions and its depreciating rial currency, Iran’s 80 million people struggle to buy meat, medicine and other staples of daily life.
Many pointed to the economy, not the possible outbreak of war, as Iran’s major concern. Iran’s rial currency traded at 32,000 to $1 at the time of the 2015 nuclear deal. Now it is at 148,000, and many have seen their life’s savings wiped out.
Nationwide, the unemployment rate is 12 percent. For youth it’s even worse, with a quarter of all young people unemployed, according to Iran’s statistic center.
“The economic situation is very bad, very bad. Unemployment is very high, and those who had jobs have lost theirs,” said Sadeghi, the housewife. “Young people can’t find good jobs, or get married, or become independent.”
Sores Maleki, a 62-year-old retired accountant, said talks with the US to loosen sanctions would help jumpstart Iran’s economy.
“We should go and talk to America with courage and strength. We are able to do that, others have done it,” Maleki said. “We can make concessions and win concessions. We have no other choice.”
But such negotiations will be difficult, said Reza Forghani, a 51-year-old civil servant. He said Iran needed to get the US to “sign a very firm contract that they can’t escape and have to honor.” Otherwise, Iran should drop out of the nuclear deal.
“When someone refuses to keep promises and commitments, you can tolerate it a couple of times, but then certainly you can’t remain committed forever. You will react,” Forghani said. “So I don’t think we should remain committed to the deal until the end.”
Yet for Iran’s youth, many of whom celebrated the signing of the 2015 nuclear deal in the streets, the situation now feels more akin to a funeral. Many openly discuss their options to obtain a visa — any visa — to get abroad.
“Young people have a lot of stress and the future is unknown,” said Hamedzadeh, the 20-year-old civil servant. “The future is so unknown that you can’t plan. The only thing they can do is to somehow leave Iran and build a life abroad.”