‘Selective tax on tobacco, alcohol, energy and soft drinks soon’

January 23, 2019

L-R: H E Eng Mohsin bin Mohammed al Sheikh, H E Dr Ahmed bin Mohammed bin Obaid al Sa’eedi and Dr Jawad al Lawati 

Oman will soon follow in the footsteps of Saudi Arabia, UAE, Bahrain and Qatar in imposing a selective tax on tobacco, alcohol, energy and carbonated drinks.

With its implementation, prices of tobacco products, alcoholic beverages and energy drinks will double as it will attract an excise tax of 100 per cent, while tax will go up by 50 per cent on fizzy drinks.

The GCC framework on ‘Unified Selective Excise Tax’ is expected to be formally ratified this year, after it was reviewed and endorsed by the Majlis A’Shura and the State Council at the end of 2018.

Speaking to Muscat Daily , Dr Jawad al Lawati, rapporteur at the National Tobacco Control Committee (NTCC), said that with the exception of Oman and Kuwait, all GCC states have ratified and implemented the selective excise tax. “As it has already been vetted by the Majlis A’Shura and State Council, only a Royal Decree is awaited for it to become a law,” he said.

Dr Lawati added that Qatar implemented the excise tax this year but it went one step further and has added pork products to the list, apart from tobacco, alcohol, energy and carbonated drinks.

Dubbed as ‘sin tax’, the excise tax to be imposed on selected goods and beverages, seen to have a level of harm associated with their consumption, was first unveiled in Oman’s 2017 budget.

The step is based on the decision taken by the Supreme Council of GCC at its 36th session held in Riyadh in 2015.

Following this, Saudi Arabia introduced the excise tax in June 2017, followed by the UAE from October and Bahrain from December 30 the same year.

Dr Lawati was recognised for his efforts in fighting tobacco use in Oman and being the focal point for tobacco cessation initiatives in the country by WHO Regional Office for the Eastern Mediterranean on Monday.

The appreciation memento was handed over by Dr Akjemal Magtymova, WHO representative to Oman, at a workshop on the implementation of tobacco taxes in Eastern Mediterranean Region (EMR) countries at Radisson Blu Hotel.

The ceremony was attended by H E Dr Ahmed bin Mohammed bin Obaid al Sa’eedi, Minister of Health, and H E Eng Mohsin bin Mohammed al Sheikh, Chairman of Muscat Municipality.

The three-day workshop, which concluded on Tuesday, aimed at analysing the status of taxation in each of the EMR countries, familiarising the participants with the WHO recommendations in the area of tobacco taxes, introducing the use of WHO tool for measuring of taxation impact and policies. It also aims to increase the participants’ knowledge about best practices and other countries’ experiences in relation to taxation increase including facing the tactics of the tobacco industry in this regard, as well as discussing and agreeing on possible scenarios of way forward for tobacco taxation policies at the national level.

Dr Akjemal said that in July 2017, WHO released the sixth edition of its Report on the Global Tobacco Epidemic that presented an alarming picture for EMR.

“Compared with other regions, EMR has a very high average smoking prevalence among men and is the only region that is expected not to see a decline in smoking prevalence till 2025. According to current projections, smoking prevalence in EMR will increase between 2010 and 2025 unless something drastic is done,” Dr Akjemal said.

Dr Sulaiman al Dhakheel, general manager of the Gulf Health Council, said that increasing the taxation is the most effective method to reduce tobacco use and demand.

He added that the average price of tobacco in EMR is lowest in comparison to other regions. A ten per cent increase in tobacco taxes leads to a four per cent reduction in consumption in the high-income countries and eight per cent in the low-and middle-income countries, he added.