Custom authorities at the King Fahd Causeway as well as at King Fahd International Airport ( KFIA) are seizing from passengers cigarette packets and cartons which do not carry valid and activated tax stamps.
Though the authorities at the Causeway did not reveal the exact amount of seizures but confirmed that since August 23 they have increased the vigil on tobacco movement. They said it is a tendency of smokers to carry one or two cartons of cigarette pack with them as the level of taxes on cigarettes and other tobacco are lower across the border in the island state than in the Kingdom.
Early this month the General Authority of Zakat and Tax (GAZT) announced that it would start imposing a ban on import of cigarette packs that do not bear valid and activated tax stamps to the Kingdom. The new regulation came into effect last week from August 23. The decision was enforced in cooperation with the General Customs Authority. The taxes fall under the category of selective taxes on products deemed harmful to public health.
In May this year, GAZT called on importers of tobacco products in the Kingdom to apply for tax stamps made available through its website GAZT.GOV.SA. The authority began its first step in putting the stages for tax stamps into action by implementing the system on cigarettes imported into Saudi Arabia, effective from May 31. This allows importers to apply for tax stamps on each cigarette pack imported from outside the Kingdom. The authority prohibited the sale and circulation of cigarette packs without tax stamps.
The application of the tax stamps will help achieve the imposition of controls on the collection of the selective commodity tax that is imported into Saudi Arabia and enhance the ability to verify the safety of the entry of selective goods within the Kingdom in a lawful manner so as to ensure that the Kingdom collects all taxes due on this type of goods. The application of tax stamps ensures that the standards of compliance set out in the WHO Convention on Tobacco Control are met.
The GAZT officials have confirmed that the application of tax stamps on tobacco products will be extended later to include other tobacco products including shisha, and then to the application of soft drinks and energy drinks subject to selective tax in the Kingdom. GAZT announced earlier that 100 percent tax would be levied on electronic cigarettes and products used in them, and a 50 percent tax on sugar-based drinks. The Kingdom already had a 100 percent tax on cigarettes and tobacco products, a 100 percent tax on energy drinks and a 50 percent one on fizzy drinks.
Heavy duty coupled with strict vigil on the movement of tobacco has resulted in sharp decline in imports of tobacco. According to official reports in 2018 import of tobacco dropped by 43.78 percent to reach SR1.76 billion from SR3.14 billion in 2017.
The weight of the imported tobacco dropped by about 27.27 percent to stand at 32,000 ton (about 88 ton daily) from 44,000 ton in 2017 registering a decrease of about 12,000 ton.
The total weight of the imported tobacco in two years decreased by about 48.39 percent from 62,000 ton in 2016 when its value was SR4.85 billion.
The steep decline is an indicator of drop in number of smokers in the Kingdom. There are indications that taxes on tobacco may go up further to discourage the citizens from getting addicted to deadly habit. It is also confirmed that smoking is more prevalent among youth in the age group of 16 to 25, despite strict ban on sale of cigarettes to non-adults, a rule hardly followed by baqalas and supermarkets selling cigarettes.
SOURCE : ALBILAD
