Sugar-sweetened beverages will be dearer by around 50 per cent effective from today, October 1, 2020, as the expanded scope of the Excise Tax Law comes into force across the Sultanate. The levy applies to virtually every category of sweetened drink and beverage (with the exception of a limited number of natural juices and milk-based beverages) sold in stores, malls, restaurants and hotels around the country.
Ahead of the implementation of the levy, the Tax Authority urged importers and traders of sugar-sweetened drinks and beverages to provide an account of any goods stored on their premises or warehouses as of September 30, 2020. The filing — known as a ‘transitional return’ (disclosure of inventory) — is required to be made within a prescribed timeframe along with the applicable excise duty on these stocks, it said.
“The transitional return must be submitted no later than October 15, 2020 so to avoid any additional tax, penalties and fines stipulated in the Excise Tax Lax’’, the Authority stated in the announcement posted on its website.
Excise Tax — also dubbed ‘Selective Tax’ — generated around RO 40 million in additional revenue to the government last year, following its maiden introduction with effect from June 15, 2019.
Included in its coverage then were tobacco and its derivatives, energy and fizzy drinks, alcohol and pork products. Now, with the scope of the levy enlarged to cover a broad range of sugar-sweetened drinks and beverages, the upshot will be sizable uptick in revenue for the government from this source.
According to tax experts, a multitude of product types fall within the scope of sweetened drinks and thus liable to the new tax. The Tax Authority’s Decision 34/2020 defines sweetened beverages as any drink in which sugar, sugar derivative or other sweetener has been added. Included in this definition are concentrates, powders, gels, extracts or compounds to which sugar, sugar derivative or other sweetener is added and which can be converted into a sweetened beverage.
Also liable to excise tax are juices, sport drinks, barley drinks (malt drinks and non-alcoholic beer), ready to drink/packaged coffee and tea and artificially flavoured powders and concentrates (capable of being converted into beverages) that contain sugar, sugar derivative or other sweetener.
Sweetening agents can range from sugar, sugar derivatives and other sweeteners (such as sucrose, glucose, fructose, lactose, galactose, coconut sugar and sugar cane) or sugar substitutes like stevia, saccharine, neotame, sucralose, aspartame, erythritol and acesulfame potassium.
But exempt from the purview of the new tax are the following: Natural fruit and vegetable juices; Milk and milk substitutes; Ready-to-drink beverages containing at least 75 per cent milk; Ready-to-drink beverages containing at least 75 per cent milk substitutes; Artificial baby milk, baby formula or baby food; Beverages intended for special dietary/nutritional needs; and Beverages intended for medical needs.
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