Sunday, February 28, 2016

Cigarette Prices are doubled in Saudi Arabia to get SR 20 billion in Taxes

The WHO or World Health Organization has estimated that the number of people who smoke, in the Kingdom of Saudi Arabia has reached almost 6 million people. This unfortunate statistic is expected to reach an astounding 10 million smokers in the Kingdom by the year 2020. The Saudis have been collectively spending around SAR 15 billion per annum just on buying cigarettes. These numbers mean that on an average every individual spends around SAR 2,555 per annum and SAR 7 per day, which is inclusive of all the costs.

The Authorities in Saudi Arabia have doubled the prices of cigarette in Saudi Arabia. Even if the price ultimately does rise to SAR 15 per packet, then it would become around half the total price of a pack of smokes in the European countries. This tariff increase will bring out billions of Riyals worth of taxes to the Kingdom. If the current sales of cigarettes per annum are estimated to be at SAR 15 billion, then the government of Saudi Arabia will be earning an approximate SAR 20 billion once the Tariffs are increased.

The Kingdom requires this large amount in order to give treatment to all those people who are affected by various diseases and disorders caused by smoking and put a burden on the budget of the Health Ministry. We are all aware that smoking causes several chronic diseases. By increasing the tariff we will involve the smokers in generating fund for their treatment if and when they fall sick because of this highly damaging habit. This additional sum can also be used to open up special rehabilitation centers which help in quitting smoking.

If smokers stop smoking due to the immensely high prices of cigarettes, that is a good thing. If they can still afford to, they will also be paying for treatment of those people who fell sick due to smoking. Personally I think the taxes and tariffs imposed upon tobacco products should primarily be used in the treatment of the diseases caused by this habit. This will in turn allow the Health Ministry to focus on other diseases or issues faced by the country, without the pressure or burden of the sick smokers.

The increase in the cigarette prices to "Double" will also send a message to all smokers and will encourage them to stop. It is a win / win situation for the government and authorities while it is a lose / lose situation for all smokers whether the tariff is increased or not. The government can and should use these extra funds for the treatment of smokers.

Source: Saudi Gazette

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