Programs for Combating Smoking, Health Tax

The Gulf Cooperation Council (GCC) states are expected to double customs tariffs on cigarette and other tobacco imports next month. A meeting of the finance ministers from six Gulf states scheduled to be held in May will approve the increase, according to a senior Saudi official. Majed Al-Monief, supervisor of the program for combating smoking at the Ministry of Health, said the ministers of finance and health from the GCC states have already agreed in principle to raise the levy charged on tobacco imports from 100 to 200 percent. “The new duty will be known as the ‘health tax,’ taking into account the huge amount of money each GCC state spends on the treatment of tobacco-related diseases as well as for the rehabilitation of smokers. The finance ministers will decide when the tax will take effect,” Al-Moneif told Asharq Al-Awsat daily yesterday. Reacting to reports about the move of UAE’s Federal Customs Authority to increase duty on all brands of tobacco products by 100 to 200 percent, Al-Monief said that it is impossible for any GCC state to take such a decision unilaterally without taking into account prevailing GCC rules and regulations with regard to tobacco products. “The GCC states can take a decision in this respect unanimously. The Gulf states had earlier hiked tobacco customs tariff from 50 to 100 percent, and are now moving toward making a further hike of 100 percent,” he said adding that the additional revenue will be utilized to combat smoking and reduce its impact on the younger generation. Al-Monief said the GCC general secretariat has sent a formal letter to the World Trade Organization (WTO) requesting it to support the GCC initiative to double the customs tariff on tobacco products. The WTO had earlier rejected a similar request from the GCC states, noting some GCC states had already reached the maximum limit for customs tariffs on tobacco products. “We are still awaiting a reply from the WTO to go ahead with our plan, in accordance with clause 20 B of the WTO Articles. This provision stipulates that any member country is entitled to take an appropriate decision with regard to any product that is harmful to human beings or animals or the environment,” he said, adding the GCC states will take advantage of this provision while doubling customs tariffs on tobacco products. The GCC Customs Union Committee earlier sent a proposal to the general secretariat to explore the possibility of increasing customs tariffs on tobacco products by 100 percent. Despite the heavy custom tariffs levied on tobacco products in the Kingdom, their imports jumped 57 percent in 2011 compared to 2009, according to a statistical report issued by the Customs Department. The Kingdom imported 57,838 tons of tobacco in 2011 valued at SR3.3 billion compared to SR2.104 billion in 2009. According to statistics, 22,000 people die in Saudi Arabia each year of various diseases resulting from smoking. According to figures released by the World Health Organization (WHO), there are 6 million smokers in the Kingdom, 1.5 million of whom are women. Saudi Arabia is considered the fourth largest importer of tobacco with the average annual consumption per individual put at 2,130 cigarettes.