JEDDAH: The price of a pack of cigarettes in Saudi Arabia will double when a selective tax becomes effective June 11. The move will put a financial strain on smokers, but it may not necessarily lead them to quit smoking.
“The government’s decision to impose a tax on tobacco means that soon we will have to pay double for a pack of cigarettes, but the price hike is unlikely to make longtime smokers kick the habit,” IT expert Ahmad Al-Juhaini told Arab News.
Many smokers like Al-Juhaini agree that smoking is a bad habit, yet they find themselves “helpless against the addiction,” as he puts it. “We may only reduce the number of cigarettes we smoke on a daily basis. It’s not easy to just switch brands,” he said adding that he believes that the increase in prices “will definitely deter youngsters from taking up smoking.”
Like Al-Juhaini, 24-year-old Bedour, who started smoking three years ago, said her smoking habits will not change following the price hike. She now pays SR12 for a cigarette pack and is willing to pay SR24 in two weeks. “I didn’t start smoking because it was cheap in the first place and I wouldn’t quit now because the prices have doubled,” Bedour, a lawyer, said, adding that she will continue to purchase the same brand despite the price hike.
Selective tax will be imposed at 100 percent on tobacco and 50 percent on soft and energy drinks, which are high in sugar. The General Authority of Zakat and Tax (GAZT) said that the “selection” entails health-damaging products, as well as products that are harmful for the environment and complementary goods.
According to its official website, GAZT lists health problems due to the increase in consumption of unhealthy goods and the expenses that individuals and the government bear in treating the consequences of consuming these products among the reasons why the tax is being imposed.
Other reasons are the Kingdom’s tax policy reforms agreements with the other Gulf states and the commitments to the regional and international conventions signed to control the consumption of harmful goods by adjusting taxes and banning the promotion of these products as well as prohibiting smoking in public spaces.
Cigarette pack prices in Saudi Arabia are almost mid-range compared to other countries around the world. According to Numbeo, a crowd-sourced global database of reported consumer prices, the Kingdom is 64th out of 127 countries in the price ranking of a cigarettes with a pack by one of the major brands costing around $3.20.
The Secretariat General of the Gulf Cooperation Council received on May 23 two instruments of ratification of the unified tax treaty from the United Arab Emirates (UAE), concerning value added tax (VAT) and selective tax, the Saudi Press Agency (SPA) has reported.
This makes the unified tax treaty in the GCC effective.
“The UAE is the second country to deposit two instruments of ratification to the Secretariat General of the Gulf Cooperation Council and as per the treaty, the submission of a second country makes activates the treaty,” SPA quoted the secretariat. The VAT will be implemented in the GCC on Jan. 1.