Carbonated drinks to cost 225 baisas from June 15

MUSCAT, JUNE 11 – Carbonated drinks will retail at 225 baisas (bz) per can or bottle in most supermarkets and stores across the Sultanate with effect from Saturday, June 15, 2019 when a new levy on certain categories of excisable goods comes into force next week. This compares with a current average retail price of 150 baisas per can or bottle of fizzy drink. Four select categories of food, beverage and tobacco products will attract an additional levy in the form of Excise Tax with effect from June 15. They comprise: tobacco and tobacco derivatives (100 per cent), carbonated drinks (50 per cent), energy drinks (100 per cent), and special purpose goods (alcohol and pork products) at 100 per cent.
Likewise, so-called energy drinks currently retailing at 500 bz apiece will cost RO 1 from next week. A pack of cigarettes, typically costing RO 1.2, will double to RO 2.4, a number of prominent importers and distributors confirmed to the Observer yesterday.
The implications of the new excise tax, along with the methodology for factoring in the additional levy, were deliberated at a workshop hosted yesterday by the Oman Chamber of Commerce and Industry (OCCI) in cooperation with the Secretariat General of Taxation (Ministry of Finance). A number of leading Omani importers, wholesalers and distributors of commodities subject to excise tax were in attendance at the event.
Sulaiman bin Salim al A’adi, Director General of Survey and Tax Agreements (Head of the Excise Tax Working Group, fielded queries from the audience on the application of the new levy and the electronic system set up by tax authorities for importers and distributors to register their particulars.
Later in remarks to the Observer, Al A’adi said the e-system has been up and running for the past three days. “Those who need to register with this system are the importers, local producers and distributors of goods subject to excise. Importers will automatically register with the system when they ship in any excisable goods. Retailers do not have to register because they are not the ones required to pay the excise tax to the SGT.”
Officials also clarified that importers will have to declare their selling price on their excisable commodities at the time of import through customs. It is on this price that the applicable excise tax (50 per cent for fizzy drinks, 100 per cent for tobacco products, and so on) will be automatically computed. Selling prices declared to the SGT will be carefully evaluated to check for deliberate underpricing — a practice that could result in reduced tax revenues to the government from the sale of those products, they warned.
Meanwhile, local stores are also bracing for a strong pick-up in retail purchases of mainly tobacco products, among other excisable goods, in the lead up to the new tax coming into force early next week. “
We reckon there will be a spurt in the sales of, among other goods, cigarettes as users stock up for their personal consumption and avoid paying the additional levy,” a representative of a prominent distributor noted.