(MENAFN - Khaleej Times) The Federal Tax Authority (FTA) provided further details about the imposition of excise tax on the expanded list of products set to come in force from January 1, 2020.
The authority explained that the Cabinet decision identifies sweetened drinks as any product to which a source of sugar or sweetener is added and is produced as either a ready-to-drink beverage or as concentrates, gels, powders, extracts, or any other form that can be converted into a sweetened drink. In that regard, sugar includes any type of sugar determined under Standard 148 of the GCC Standardisation Organisation and any subsequent relevant standards.
Meanwhile, sweeteners include any type of sweeteners determined under Standard 995 of the GCC Standardisation Organisation and any subsequent relevant standards.
The decision also outlines beverages that are not included in the new tax, namely, ready-to-drink beverages containing at least 75 per cent milk; ready-to-drink beverages containing at least 75 per cent milk substitutes; baby formula or baby food; beverages consumed for special dietary needs, as determined under Standard 654 of the GCC Standardization Organization under the heading 'General Requirements for Pre-packaged Foods for Special Dietary Use' and any subsequent and relevant standards; and, finally, beverages consumed for medical uses, as determined under Standard 1366 of the GCC Standardization Organisation under the heading 'General Requirements for Handling of Foods for Special Medical Purposes', and any subsequent and relevant standards.
On a side note, the authority clarified that as per the decision, e-liquids include all liquids used in electronic smoking devices and tools and the like, whether or not containing nicotine or tobacco. Meanwhile, e-cigarettes refer to all electronic smoking devices and tools and the like, whether or not they contain nicotine or tobacco.
Khalid Ali Al Bustani, director-general of the FTA, explained that the authority has set a comprehensive plan to implement the new decision which includes, in addition to the updates made to registration systems, several manuals and guides clarifying the standards and procedures for implementing excise tax on sweetened drinks, electronic smoking devices and liquids. The guides break down the steps needed to carry out the registration - both for taxable persons and excise goods - as well as the timeline and deadlines.
The authority has started the procedures related to implementing Cabinet decision on excise goods, excise tax rates, and the method of calculating the excise price, issued in August 2019, which expanded the scope of excise goods to include electronic smoking devices and liquids, and sweetened drinks.
As part of phase 1 of implementing the Cabinet decision, the FTA called on producers, importers, and stockpilers of sweetened drinks with added sugar to abide by the decision and start registering for excise tax purposes, noting that excise tax is an indirect tax that is imposed on certain products deemed harmful in an effort to curb their consumption.
The authority revealed that it has updated the electronic registration system for excise goods to allow for adding the new products included in the amended Cabinet decision.
An entirely new registration procedure was put in place as of August 18, 2019, and the FTA called on all concerned businesses - including producers, importers and stockpilers of excise goods - to take the initiative and register said goods in the new system. Furthermore, the authority called on all businesses dealing with sweetened drinks to go ahead and register for excise tax purposes and register their products within the FTA's new system as part of phase 1 of registration, where the authority will announce the next phase of the registration that will include electronic smoking devices and liquids used in the devices.
As per the decision, the FTA specifies the necessary procedures to classify excise goods, and may request persons to provide documents or laboratory evidence to determine the content of a certain product and properly classify it.