Price of Saudi cigarettes doubles as first tax hits

AFP, Riyadh: The price of a pack of cigarettes doubled for Saudi Arabian smokers on Sunday under first-time tax measures to help the kingdom cope with a drop in oil revenues.
Residents of the world’s biggest oil exporter long enjoyed a tax-free and heavily subsidised existence but a collapse in crude prices since 2014 sparked cutbacks and a search for new revenue.
The “selective tax”, effective from Sunday, raised the price of tobacco 100 per cent, to between about 18 riyals ($4.80/4.30 euros) and 24 riyals ($6.40/5.70 euros) per pack.
The cost of energy drinks also doubled and the price of soft drinks rose 50 per cent, according to the General Authority of Zakat and Income Tax.
Cigarettes and fizzy drinks are popular in Saudi Arabia, where alcohol is banned.
One smoker, Hamad al-Ishewan, 33, told AFP the new tax won’t affect his habit “even if it was 100 riyals for a pack”.
But at a shop in Riyadh’s west, Naif al-Rashid, 25, said he has now sworn off energy drinks.
“Raising the price of energy drinks is a good thing, because most of those who consume them are youngsters and that affects their health,” Rashid said.
Saudi Arabia’s implementation of the new tax follows an agreement among the six Gulf Cooperation Council nations, and is line with International Monetary Fund recommendations.
GCC states also intend to introduce a value-added tax of five per cent on certain goods in 2018.
Since last year Saudi Arabia has pursued a wide-ranging social and economic reform plan to develop its industrial and investment base while boosting small-and medium-sized businesses.

Price of Saudi cigarettes doubles as first tax hits

AFP, Riyadh: The price of a pack of cigarettes doubled for Saudi Arabian smokers on Sunday under first-time tax measures to help the kingdom cope with a drop in oil revenues. Residents of the worlds biggest oil exporter long enjoyed a tax-free and heavily subsidised existence but a collapse in crude prices since 2014 sparked cutbacks and a search for new revenue. The selective tax, effective from Sunday, raised the price of tobacco 100 per cent, to between about 18 riyals ($4.80/4.30 euros) and 24 riyals ($6.40/5.70 euros) per pack. The cost of energy drinks also doubled and the price of soft drinks rose 50 per cent, according to the General Authority of Zakat and Income Tax. Cigarettes and fizzy drinks are popular in Saudi Arabia, where alcohol is banned. One smoker, Hamad al-Ishewan, 33, told AFP the new tax wont affect his habit even if it was 100 riyals for a pack. But at a shop in Riyadhs west, Naif al-Rashid, 25, said he has now sworn off energy drinks. Raising the price of energy drinks is a good thing, because most of those who consume them are youngsters and that affects their health, Rashid said. Saudi Arabias implementation of the new tax follows an agreement among the six Gulf Cooperation Council nations, and is line with International Monetary Fund recommendations. GCC states also intend to introduce a value-added tax of five per cent on certain goods in 2018. Since last year Saudi Arabia has pursued a wide-ranging social and economic reform plan to develop its industrial and investment base while boosting small-and medium-sized businesses.