Cigarette prices set to soar after new Gulf tax - Emirates24|7

Cigarette prices set to soar after new Gulf tax

Smokers should brace themselves for a fresh rise in the price of cigarettes when a new tax approved by the UAE and other Gulf oil producers is enforced at the end of 2012, an official was reported on Monday as saying.

Health ministers from the six-nation Gulf Cooperation Council (GCC) endorsed the “health tax” at talks in Saudi Arabia in early January as part of joint plans to curb the consumption of tobacco in the region, said Dr Widad Al Maidoor, head of the anti-smoking section at the UAE Ministry of Health.

“The new law is intended to reduce tobacco consumption in the GCC and envisages the imposition of a new tax called ‘health tax’.…it will affect tobacco products and equipment used in its production and manufacturing…the tax will amount to 100 per cent of the product’s value.”

Quoted by the semi official daily Alittihad, Maidoor said the new law would be enforced at the end of 2012 after it is approved by the GCC finance ministers.

Cigarette prices have steadily increased over the past years following a series of GCC taxes and a surge in global prices of most consumer items.

Dealers said that despite the rise, cigarette prices in the region remain far below those in advanced countries. “In Britain for example, a 20-cigarette pack now sells for nearly Dh30, more than four times the prices here,” said an owner of a supermarket in Abu Dhabi.

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