ECONOMY

Saudi Arabia introduces new tax on tobacco, raise prices by 100 percent

There are six million smokers in Saudi Arabia and that number is set to increase to 10 million by 2020. (Reuters)

Saudi Arabia has announced the increase of the prices of tobacco and its derivatives by 100 percent in accordance with the decision of the Gulf Cooperation Council at its 36th session, which approved the amendment of the minimum threshold for the fulfillment of tobacco in the unified tariff in the GCC.

At the end of last week, smokers on social networking sites circulated a letter from the Director General of Customs in Saudi Arabia announcing that the new price will be come into effect at the beginning of the new Hijri month, which inflamed the hearts and minds of smokers, forcing most shops to write a hint in broad lines that there is no “tobacco” and to stop asking about it.

Saudi Customs spokesman Issa Al-Issa confirmed to Al Arabiya that the decision came into effect on Thursday, by modifying the qualitative tariff or the value tariff, whichever is higher, in line with the GCC agreements, pointing out that the application coincided on a specific date in all countries of the GCC.

A store front notice in Riyadh read ‘We do not have any tobacco in store. Please do not disturb’. (Supplied)

“The increase is according to the decision is equivalent to twice the minimum limit for the fulfillment currently applied to all types of tobacco and its derivatives, especially that the minimum value declared by some importers of tobacco and its derivatives to customs is no longer representing the real value,” Al-Issa explained, noting that the customs association is not related to the internal market, prices or even that shops stopped selling tobacco.

Recurring scenario?

Sales outlets have been empty since Friday afternoon of cigarettes after the spread of the news of raising the price of 20 Saudi riyals. It started when the decision was issued to apply the customs regulations on tobacco and its derivatives, where some intended to buy large amounts of the cigarettes to be prepared for any rise in prices. In addition, traders in the tobacco market have confirmed that some people are withdrawing large amounts in the hope of selling it with the new price. Others have already sold tobacco at the high price as per the previous anticipation of a price hike.

Hussein, a Saudi citizen, told Al Arabiya he was afraid of repeating the scenario he lived about 53 years ago when there were no tobacco cigarettes left in the Saudi markets, where he began to contact his friends after he ran out of smokes in search of supplements.

Hussein was not the only. There are six million smokers in Saudi Arabia and that number is set to increase to 10 million by 2020.

RELATED: Find out which Saudi city has the most smokers

Many Saudis like Hussain took to launching a hashtag on Twitter where they complained about the rise in tobacco prices to be 20 Saudi riyals. Hussein said that 53 years ago, when he began smoking for the first time, was difficult enough to buy cigarettes and its high price at the time.

Abdullah Al-Qahtani, director of relations and media at the “Purity” Association, told Al Arabiya that the World Health Organization reports that 12 billion Saudi riyals are spent on buying tobacco in Saudi Arabia, which will increase by 100 percent now that they price hikes have taken place. Al-Qahtani revealed that Saudi Arabia occupies the fourth place in the world in the percentage of smokers, adding that smoking prevails in 40 percent in males, 10 percent in females and 15 percent in adolescents.

According to a study by the association in Riyadh, the smoking percentage among school students is 10 percent of smokers in Saudi Arabia, while 40 percent of the both genders are subjected to forced smoking outside home.
 

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Last Update: Saturday, 10 June 2017 KSA 19:14 - GMT 16:14
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