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Smokers may have to spend more
DUBAI - A proposal to increase the wholesale prices of cigarettes is almost ready to be put forward to higher authorities. The proposed increase or ‘health tax’ will see a rise in the wholesale cigarette prices ranging between Dh10-12 per carton.
Besides hoping to deter smokers, part of the funds raised from the tax will be used for health awareness campaign against tobacco use and even to treat patients suffering from tobacco-related ailments, said a senior health official.
According to the World Health Organisation, prices of cigarettes in the UAE and region are among the lowest. In the country, the retail price of a pack of 20 cigarettes is from anywhere between Dh2-7.
“This is only a small increase in the price and not what we had hoped it would be,” said Dr Wedad Al Maidoor, Head of the National Tobacco Control Committee at the Ministry of Health. “But it is a start.”
The proposal is currently being finalised by the Ministry of Finance with other partners including the health ministry.
“We are just a step away from finalising the proposal and presenting it to the Cabinet,” she said without specifying a date.
The health tax was proposed in January 2010 after initial discussions to levy a 200 per cent import duty was rejected by the finance ministry fearing loss of business to other regional countries that follow the GCC Customs Law of 100 per cent taxation.
Taxation is also part of the federal anti-tobacco law that is being fine-tuned for implementation. “We haven’t specified the details of the taxation in the new law but are working on it in the appendix,” she said.
Dr Wedad hoped the increase would put an end to illicit tobacco trade. “The taxation will reduce illicit tobacco business and at least control cigarette companies as they will be required to register with the Ministry of Finance,” she explained.
According to a WHO 2010 report on ‘Tobacco Taxation in the Eastern Mediterranean Region,’ higher prices deter youth and adults from smoking but despite this data, taxation is the most under-utilised resources. Until now many forms of smoking such as shisha, smokeless tobacco, cigars and snuff has not been fully brought into the tax net.
There is no excise taxation system in high income countries in the region including the UAE, says the report. The report recommends that all countries should rely more on excise taxes rather than import duties.
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