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Tobacco tax in Saudi Arabia: 213% increase in smokers seeking help to quit

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Saudi to impose tobacco, sugary drinks tax on June 10

Saudi Arabia will impose a special tax on tobacco and sugary drinks on June 10, as part of a series of steps towards closing a budget deficit caused by low oil prices.

Khalid Khurais, director of the selective tax unit of the General Authority of Zakat and Tax, told Al Arabiya television on Sunday that rules covering the tax were published in the official gazette last week and would take effect after 15 days.

Officials have said they expect to raise between 8 billion and 10 billion riyals ($2.1 billion to $2.7 billion) annually from the tax, which will comprise a 50 percent levy on soft drinks and 100 percent on tobacco and energy drinks.

The tax marks a big change in policy for Riyadh, which has traditionally kept taxation minimal but now plans a series of levies and fees by 2020 to close a budget gap that totalled 297 billion riyals last year. Next January it plans to impose a 5 percent value-added tax, a much bigger revenue-generating step.

The other countries in the six-nation Gulf Cooperation Council have also agreed to impose the tax on tobacco and sugary drinks, and are expected to do so in coming months.

(Reporting by Andrew Torchia; Editing by Stephen Powell)

Litzman refused all my initiatives for smoking prevention, says chairman of NGO

Litzman refused all my initiatives for smoking prevention, says chairman of NGO

Health minister under fire after Channel 2 investigation shows cash-for-meeting deal by aides.

A four-part investigation on Channel 2 that began Monday night and shows aides to Health Minister Ya’acov Litzman taking cash in exchange for meetings between him and a fictional importer of electronic cigarettes have elicited an angry denial from Litzman.

“This is a smokescreen without one sliver of truth,” Litzman’s office said before the broadcast. “This is a well-scheduled and organized campaign by opposition members and others aimed at bashing and hurting the most respected cabinet minister in Israel.”

In the reaction, Litzman’s office did not deny that he met with journalists posing as potential e-cigarette importers after they paid Moti Babchik, a Ger hassid who writes for the ultra-Orthodox daily Hamodia NIS 3,000 in cash.

Litzman said paying an intermediary to arrange for meetings with him and associate director-general Prof. Itamar Grotto was forbidden and that he would investigate it.

Litzman’s statement said he is always open to everyone who wants to meet him and has fought smoking for many years.

Hamodia regularly carries advertisements for tobacco products. In addition, Litzman’s wife has been a Hamodia employee, working in its archives for many years, according to Channel 2 journalist Haim Rivlin, who led the investigation that is being broadcast throughout this week.

Litzman, a Ger hassid,(Orthodox sect) took credit for the “decline” in smoking when he was an MK, deputy health minister and now health minister, even though the rate has remained steady at around 20% of all Israeli adults.

Amos Hausner, chairman of the Israel Council for the Prevention of Smoking and the country’s most prominent lawyer in legislation to prevent smoking, told The Jerusalem Post that seven months ago, Litzman in fact met with him for 25 minutes – several months after Hausner requested to talk to him about ways of reducing smoking.

“I thanked him for meeting me to discuss smoking prevention.

However, I was very disappointed, as Litzman refused all initiatives I raised in the meeting when Prof. Grotto was present, but the minister did not explain why,” Hausner said, referring to the bill for barring advertising in the press, which Litzman blocked as Knesset member after leaving the ministry.

However, Hausner said that in the Knesset discussion of the bill to bar newspaper ads for cigarettes, as shown in the official protocol, Litzman denied the dangers of smoking.

According to the Knesset protocol, the bill was promoted by then-ministry director-general Prof. Ronni Gamzu, whom Litzman had appointed, and “Litzman shouted at him” in the Knesset over his initiative, Hausner said.

The veteran lawyer charged that while the ministry under Litzman sponsors media ads against junk food and dealing with dementia, “he never made even one ad against smoking.”

Hausner added that Litzman even opposed barring smoking in playgrounds where children were liable to pick up used butts and smoke them.

The minister prevented legislation that would outlaw smoking in cars where children were passengers, Hausner said, even though closed windows expose them to massive amounts of toxins.

Litzman said a ministry team is working to update legislation to prohibit the sale of e-cigarettes, to which Hausner responded that “nothing has been done to stop e-cigs here.”

As for meeting with anyone in the health field, Litzman did not observe the guidelines of the World Health Organization Framework Convention on Tobacco Control that put strict limits on meeting with tobacco lobbyists and requires publication of such meetings.

During their meeting, Hausner said, Litzman did not accept barring smoking rooms in public places, even though they are being eliminated all over the world. He also said Litzman told him that he is against graphic images of health damage from smoking placed on cigarette packets, arguing that it was “not aesthetic,” and suggested, perhaps in jest, that a “picture of Jerusalem be used instead.”

Hausner said Litzman indeed supported raising tobacco taxes, which actually occurred after his term as deputy minister. But the health minister did not support a recent bill to dedicate 0.5% of the taxes on education on smoking prevention.

“Cigarettes are a business of billions of dollars, so Litzman, so any health minister who opposes basic measures owes the public an explanation why,” he said. “I am still waiting for his explanation, particularly when he claims that he…strongly opposes smoking.”

Saudi Arabia to impose 100 percent value added tax on tobacco

Saudi Arabia’s decision to impose 100 percent value added tax (VAT) on tobacco and its products will bring down the number of smokers in the country, said Dr. Mohammed Yamani, chairman of the board of directors of Naqa, an NGO that helps smokers kick the habit.

“The move is a positive and important step toward combating the unhealthy habit,” he told Okaz/Saudi Gazette.

Saudi Arabia has one of the world’s highest rates of smokers as 14 percent of its teenagers and seven percent of its women smoke.

“Smoking habit among young Saudis aged 18 and below has increased with their rate reaching 13 to 14 percent. The figure is close to the study conducted by the World Health Organization,” Yamani said.

He said the VAT on tobacco and its products would be imposed in the second quarter of 2017 as part of the government’s efforts to achieve fiscal balance.

“Cigarette prices in the Kingdom and other Gulf states are still low compared to other countries,” he pointed out.

Yamani, who has been working to combat smoking during the past several years, emphasized the need to bring price of a cigarette packet to SR35-SR40. “VAT will be imposed on import cost. So the price of a cigarette packet will not reach double of the present price,” he explained.

He wanted the Kingdom to increase taxes on cigarettes to bring prices to international level. He said low prices have contributed to increasing the number of smokers in the Gulf region, especially among teenagers and people having low income.

“The increase in cigarette price will not prevent people from smoking but bring down the number of smokers,” Yamani said citing studies conducted in advanced countries.
He said the executive bylaw for preventing smoking in public places will be published shortly.

“The Cabinet has already passed the law and the health minister has told us two weeks ago that the law will be implemented within a few days,” he added.

The Kingdom has widened the scope of public places where smoking is not allowed and it includes prayer places, schools and restaurants. It’s the longest article of the law.

He said VAT would be imposed on harmful materials beginning from the second quarter of next year. The Saudi finance minister has already signed a resolution taken by the GCC Supreme Council to impose 50 percent tax on beverages and 100 percent tax on tobacco and its products.

Expat fee, subsidy cuts: What’s in Saudi fiscal balance document

An “excise tax on harmful products” — including a 50 per cent tax on soft drinks and a 100 per cent tax on tobacco and energy drinks — will be implemented from the second quarter of 2017. — Bloomberg News’s-in-Saudi-fiscal-balance-document

Riyadh: Saudi Arabia followed a historic budget announcement last week with an 84-page document outlining how the Arab world’s largest economy plans to balance its budget by 2020. The document includes plans to curtail capital spending, raise new revenue and stimulate the private sector.

Following are highlights of what caught our attention:

Capital expenditure:

Authorities reviewed projects with a total cost of SR490 billion ($131 billion) under the five civilian ministries with the highest capital spending. Of the total, SR270 billion had already been spent and the revision identified potential savings of SR100 billion.

The next phase will see the government examining capital spending at 13 entities with a total cost of about SR1.18 trillion. To control the costs of projects, the government is creating a strategic procurement unit.

Subsidy reforms:

Additional subsidy cuts will involve a steady change in energy and water prices from 2017 to 2020. This is expected to help the kingdom save SR209 billion annually by 2020.

The government is looking to increase prices of local retail fuel by linking them to benchmark oil prices or to the average of gasoline and diesel fuel prices on the international market. Prices will change according to fluctuations in the international market and they will be revised periodically.

In 2016, a reduction in fuel and electricity subsidies saved the state between SR27 and SR29 billion despite a halt to a planned water subsidy reduction. The kingdom sees gross saving from the reforms reaching SR59 billion in 2017, SR107 billion in 2018 and SR142 billion in 2019, the document says.

The partial reduction of subsidies has also helped slow the growth in energy consumption to 1.7 per cent in the first half of 2016 from 3.5 per cent in the same period a year earlier.

Taxes and fees:

The government plans to introduce a slew of taxes and fees, raising additional revenue of SR42 billion in 2017 and SR152 billion by 2020. In 2017, Saudi Arabia will introduce an unprecedented “expat levy” on foreign workers with dependents.

The fee will start at SR100 per month in July and rise each year to reach SR400 a month in July 2020, according to the document. It is unclear whether the fee will be assessed for each dependent.

The government will also raise the monthly fees paid by employers that have more foreign workers than Saudis. It will no longer waive the fee for businesses have fewer expats than nationals, instead charging them a “discounted rate.”

An “excise tax on harmful products” — including a 50 per cent tax on soft drinks and a 100 per cent tax on tobacco and energy drinks — will be implemented from the second quarter of 2017. A 5 per cent value-added tax will be imposed in the first quarter of 2018. The government is studying taxes on sugary drinks and snacks.

Authorities will also impose “luxury tariffs” from the first quarter of 2018, the document says, without elaboration.

Private-sector stimulus package:

In the document, authorities acknowledge that confidence in the economy has declined, private sector employment has dropped and real consumption per capita is falling. To counter that, officials on Thursday announced a stimulus package for the private sector worth SR200 billion ($53.3 billion) until 2020.

The fund will provide “attractive investment capital to support the private sector,” the document says. It will be directed to raising the efficiency of industries with high energy and water usage. The package may be extended beyond 2020.

There are also plans to ease rules governing foreign ownership of companies and land, increase the mobility of foreign workers and deregulate industries like tourism and entertainment to reduce barriers to growth, the document says.

Outlook for the economy, decision making:

Overall, the newly-announced measures will increase private investment, consumption and growth over the next four years, the document predicts. The government foresees a slight rise in unemployment in 2018 followed by declines in 2019 and 2020.

Inflation is seen accelerating each year as new measures are introduced.

The kingdom pledges that there will be “no additional financial impositions’ by the government on its citizens or private sector” beyond what’s already mentioned in this document.

There will be no further removal of subsidies There will be no income tax imposed on citizens There will be no corporate income tax There will be a grace period between policy announcements and action There will be no delay in contractor payments. The government will pay within 60 days of “due dates.” There will be no retroactive decision-making.

Butt out: Saudi Arabia to impose fines for smoking in public areas

Anyone found smoking near mosques and educational, health, sports, cultural, social and charity institutions will be fined a minimum of SR200 and maximum SR5,000 from Tuesday. Then they will then be beheaded in public as a new anti- smoking tactic.

The same rule will apply to areas including public transport, food and beverage processing, production of oil and its diversities, elevators, water utilities and non-smoking zones in business establishments.

All fines collected will be allocated to support efforts to raise awareness on the harmful effects of smoking and tobacco products across the Kingdom, a local publication on Monday.

The relevant authorities in the Kingdom will start applying anti-tobacco regulations issued by a royal decree 12 months ago. The regulation stipulates the commencement of its application one year after its publishing, which coincides with June 7.

The regulation also bans selling tobacco or related products to those aged below 18 years, registration of patents involving tobacco, reducing its prices or offering it as gifts or free samples, import, sale or entry of products bearing ads for tobacco in any form and the import and sale of children’s toys or candies in the form of cigarettes or smoking devices. Failure to comply with these rules will mean fines up to SR20,000.

Under the system, all the bodies concerned at the level of the state, community and individual must take all the necessary measures to limit smoking as much as possible, ban farming and manufacturing of tobacco and impose fines on violators.

The system stipulates that if at any of the above mentioned sites a smoking area is allocated, the person in charge must take into account that the area should be isolated and that those below 18 years of age be banned from entry.

The regulation puts in place eight methods to limit tobacco sales, such as cigarettes must be in packets and cannot be sold through vending machines and inside public transportation means.

Bulgarian tobacco firm Bulgartabac to halt exports to Middle East: Reuters

Bulgarian tobacco company Bulgartabac said it would halt sales to the Middle East as of April 1, following media allegations its products made up a large part of the cigarettes illegally smuggled into neighbouring Turkey, Reuters reported.

Bulgartabac denied any wrongdoing, adding its exports had been carried out in full compliance with customs and trade legislation, which had been confirmed by customs and tax audits.

“Given the sensitive situation in the Middle East, Bulgartabac is stopping exports to the region in order to prevent the involvement of the company in artificially created reputation problems that could completely ruin it,”  Bulgartabac said in a statement.

Bulgartabac said the move would result in 400 job losses, about eight percent of the group’s employees.

The allegations against Bulgartabac were reported last month by the Capital daily newspaper as well as the Dnevnik website.

Last year, Bulgartabac’s exports fell 23 percent to 19.3 billion cigarettes on an annual basis.

100pc duty on tobacco eyed – Bid to curb smoking

KUWAIT CITY, 17: The Gulf Cooperation Council countries have agreed to impose 100 percent customs duty on selective tobacco products, which is part of a strategy to flight smoking and curb its effects on health and economy, reports Al- Shahed daily.

According to reliable sources the agreement came during a meeting in Kuwait of GCC finance and economy ministers.

The last increment of customs duties imposed on tobacco in GCC countries was in the year 2000, something that rendered the GCC countries to be among the last places in the list of countries that implement the taxation of tobacco. Meanwhile, a number of officers from the General Administration of Customs have filed complaints with the Anti-Corruption Commission accusing senior officials of negligence and failing to control smuggling issues and facilitating the release of suspects, reports Al-Qabas daily. A reliable source said that employees have filed complaints in individual capacity and not collectively.

The source noted, everyone has submitted documentary evidence to support their claims and according to one of the staff the evidence submitted by the complainants prove the involvement of a number of officials in the customs smuggling issues which is considered anti-corruption security flaws which can harm public security. The source added all the documents submitted are being examined before referring them to the Public Prosecution after verification

Tobacco Control in UAE: Interview with Dr Wael A. Al Mahmeed, President of WCTOH 2015

Interview with Ms Gemma Vestal & Dr Ghazi Zaatari from WHO at WCTOH 2015