The move by the General Authority of Zakat and Tax, which is responsible for collecting duty, has led to heavy sales of energy drinks ahead of the implementation date. Many shelves were left empty before the midnight deadline, local media reported.
The new 100% levy also applies to cigarettes, while a 50% tax has been added to carbonated drinks. Officials expect to accrue additional excise tax revenues of SAR7bn (US$1.9bn) within just six months following its introduction.
The price of a 250ml can of Code Red energy drink has increased to SAR4 (US$1.07) from SR2, while Red Bull is now priced between SAR10 and SR12, according to the Saudi Gazette.
The tax authority has been working hard to urge retailers to register for the new taxes, which will be payable monthly. Companies that engage in stockpiling will face penalties.
In a statement on its website, it said: “The GAZT has stated that every person who possesses excise tax goods should file a return for the transitional period starting Sunday, June 11, and pay accordingly within 45 days, to avoid being subject to legal penalties and fines.”
The new signage, posted in retailers and printed on energy drink cans, is in Arabic and English. It says: “This product does not have any health benefits. Consuming more than two cans a day may negatively affect your health.”
The UAE is expected to introduce a similar sin tax in the fourth quarter this year.
Gulf Cooperation Council countries are also set to implement a VAT of 5% on certain goods from 2018.