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Will a 100% rise in tobacco taxation help quit smoking?

It will happen in 2017. GCC countries are in the process of determining the value added tax on tobacco imports.

Tax on tobacco in the six-nation Gulf Cooperation Council (GCC) will go up from 100 per cent to 200 per cent in 2017. Governments hope to encourage more citizens and expatriates to kick the habit of smoking, Obaid Humaid Al Tayer, Minister of State for Financial Affairs, has said.

He announced this after attending a Federal National Council session.

In the 101st meeting of the Financial and Economic Committee represented by the ministers of finance and economy in the member states last month, GCC countries had agreed to impose “selective taxation” of 100 per cent on tobacco and its products. This is similar to the 100 per cent customs duty charges in the UAE.

“While there is a problem in collecting the charge on tobacco tax at present, there are some emirates that convert the charge between the local and federal treasury on a fifty-fifty basis,” he said.

He disclosed that the GCC countries are in the process of determining the value added tax on tobacco imports.

An economist, who spoke on the condition of anonymity, said: “The move will support the budgets of the GCC member countries by increasing the revenues through increasing the tax rate as is the case in many other countries.

“The decision will contribute effectively to increasing the prices of tobacco. This will help reduce tobacco consumption on the local level.”

According to the World Health Organisation (WHO), tobacco consumption is one of the largest public health hazards the world has ever had to confront. Over 5 million people are killed each year – an average of one human every six seconds.

More than 80 per cent of the 1 billion regular smokers around the globe live in low- and middle-income countries. It is in these countries where the burden of tobacco-linked diseases and death is heaviest, according to a WHO report.

According to a study released on the sidelines of the ‘Tobacco or Health’ conference held in Abu Dhabi recently, Kuwait topped the list of GCC countries with the largest number of smokers. In Kuwait, 31.3 per cent of the population smoke; while in Bahrain, 23.8 per cent do. In Saudi Arabia, 22.2 per cent smoke; in Qatar, 19.4 per cent; in UAE, 18.1 per cent; and Oman, 13 per cent.

In Saudi Arabia, six million people are smokers, and cigarette sales in the kingdom are worth $2 billion. In Iraq, 7 million smokers spend $500 million every year on cigarettes.

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