Query on the new levy of 50% Selective / Excise Tax in UAE and KSA on Sweetened beverages

Understand from the UAE Guideline that, Sugar Sweetened Beverages have been defined for Excise Tax purposes, as per the following:

Any ready-to-drink beverages that contain added sugar or added sweetener; Any concentrates, powders, gels or extracts intended to be made into an Sugar sweetened beverages ('SSB'). FTA excludes certain beverages from the scope of Excise Tax, like Ready-to-drink beverages containing no less than 75 percent milk or milk substitutes…..

Further googled the definiton of SSB and found the details
in http://www.health.ri.gov/healthrisks/sugarsweetenedbeverages/, which defines SSB as:

'Drinks with added sugar including: non-diet soft drinks/sodas, flavored juice drinks, sports drinks, sweetened tea, coffee drinks, energy drinks, and electrolyte replacement drinks. The calories in sugar-sweetened beverages can contribute to weight gain and provide little to no nutritional value. Sugar-sweetened beverages do not fill you up the same way that food does.

Those extra calories can lead to other health risks including obesity, tooth decay, heart disease and type 2 diabetes.'

My query is whether Coffee / Tea (with added Sugar but without Milk) sold in Starbucks or any other coffee shops, will levy this 50% Excise tax or NO?

I spoke to Kingdom of Saudi Arabia General Authority of Zakat & Tax ('GAZT') helpdesk, and they informed me that, Such coffee shops will NOT levy this tax, as such drinks (cofee or tea) will be considered as ‘FRESH DRINKS’ and not  concentrated / sweetened beverages.

Wish to know from Industry experts on the position taken in UAE.

Personal Regards,
Ganesh Nair 

Ganesh Nair

28/11/2019 13:20:37

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