Prices of soft drinks, cigarettes go up in Saudi Arabia

The price of a pack of cigarettes doubled for Saudi Arabian smokers on Sunday under first-time tax measures to help the kingdom cope with a drop in oil revenues.

The “selective tax”, effective from Sunday, raised the price of tobacco 100 per cent, to between about 18 saudi riyals and 24 saudi riyals per pack.

The cost of energy drinks also doubled and the price of soft drinks rose 50 per cent, according to the General Authority of Zakat and Income Tax.

But at a shop in Riyadh’s west, Naif Al Rashid, 25, said he has now sworn off energy drinks.

“Raising the price of energy drinks is a good thing, because most of those who consume them are youngsters and that affects their health,” Mr Al Rashid said.

Saudi Arabia’s implementation of the new tax follows an agreement among the GCC nations, and is line with International Monetary Fund recommendations.

GCC states also intend to introduce a value-added tax of five per cent on certain goods in 2018.

Since last year Saudi Arabia has pursued a wide-ranging social and economic reform plan to develop its industrial and investment base while boosting small-and medium-sized businesses.

The effort aims to create more jobs for Saudis and reduce reliance on oil revenue.