Soft drinks in GCC may be costlier

(SUPPLIED)

Soft drink lovers should brace to pay 50 per cent more for their beverage when a proposed tax on these products is enforced by the UAE and other Gulf oil producers, press reports said on Tuesday.

Smokers, already stung by a 100 per cent rise in cigarette prices, could also pay 50 per cent more as the recommended tax also applies to tobacco.

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Health ministers from the six-nation Gulf Cooperation Council (GCC) proposed the 50 per cent tax on both products at a recent meeting in Saudi Arabia. The proposal was presented to the GCC finance ministers for 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 per cent tax on selective soft drink products and a further 50 per cent on tobacco, which is already subject to a 100 per cent tax…the study recommends that the tax on tobacco should be 150 per cent given the harmful effects of this product.”

Quoted by Emarat Al Youm Arabic language daily, Al Khoury said the proposal has to be approved by each GCC nation before it is enforced collectively. “I cannot give a date for the enforcement of these taxes as this depends on a reply by each GCC member,” he said.

A recent official Arab study showed the GCC nations, which control over 40 per cent of the world’s recoverable oil deports, are among the world’s largest consumer of soft drinks and tobacco because of the low prices of such products, high per capita income and lack of awareness campaigns.

The GCC’s population exceeded 50 million at the end of 2010, with Saudi Arabia accounting for more than half. Expatriates make up over two-thirds of some members while they are below a third in Saudi Arabia.

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