RIYADH: The Saudi Shura Council has endorsed the draft Selective Tax Scheme (STS), according to Sabq newspaper. Chaired by Dr Shaikh Abdulla bin Mohammed bin Ibrahim, the panel approved the plan which will be submitted to Saudi King Salman bin Abdulaziz Al Saud in compliance with Shura Council regulations. The selected tax-levying system is expected to be given the go-ahead today at the weekly Cabinet meeting, to be chaired by the Saudi monarch. The STS system will be restricted in the first phase to goods which are deemed harmful to human health. Once endorsed, a 100 per cent tax will be imposed on tobacco and its products and a 50 per cent tax on energy and carbonated drinks. The Shura Council urged those targeted by the new scheme to regulate their situation within 30 days from the day the new scheme is published in the official gazette. The new tax system is expected to be enforced by mid-May, according to sources.
The General Authority for Zakat and Income is co-ordinating with the Ministry of Commerce and Investment to prevent trading outlets building large stocks of goods listed in the new tax system, during the transitional period, to be sold later at the new prices. A wide-ranging campaign will be launched to inspect warehouses, check bills and clampdown on trading outlets which try to circumvent the new law. In a statement after the session, Dr Yahya Bin Abdullah Al Sama’an, assistant chairman of the Shura Council, said that the council took its decision after hearing the opinions of the Financial Committee. The proposed tax regulation stems from the unified agreement on selective tax, which was signed by GCC member states on October 10, 2016. Under paragraph 2 of Article 29 of the GCC agreement, each country shall promulgate a local law that sets the rules for implementing the agreement and drawing up the policies and procedures. A report in Akhbar 24 online paper said the scheme would be expanded in its second phase (Phase 2) to include luxury clothes, cars and foodstuffs.
