Saudi Arabia Launches Cigarette Tax

June 12, 2017 Taxation in Saudi Arabia

Smoking in Saudi ArabiaRIYADH – Smoking in Saudi Arabia is about to double in price, as the government begins taxing harmful activities.

On June 11th the sale of cigarettes in Saudi Arabia became taxable, resulting in a significant hike to the price of tobacco sold in the kingdom.

The tax on tobacco is set at a rate of 100 percent, and is expected to be passed on entirely to the consumer.

Similarly, a new tax was also enacted on the sale of energy drinks, with a rate set at 100 percent.

Soft drinks have also now fallen into the tax net, however, the rate on such drinks is only 50 percent.

The average price of a pack of cigarettes in Saudi Arabia has now risen to between SAR 18 and SAR 24.

The new tax is intended to raise extra revenues for the government, which has been suffering in the wake of falling oil prices around the world.

It is expected that other countries which are members of the GCC may also implement similar taxes, as they had previously agreed to implement joint taxes, as per the suggestions of the International Monetary Fund.