Can a sin tax stifle tobacco demand?

Can a sin tax stifle tobacco demand?

February 20, 2016
Can a sin tax stifle tobacco demand?
Can a sin tax stifle tobacco demand?

Saudi Gazette report

Saudi Gazette report

Calls for raising tobacco prices by up to 100 percent have seen many members of Saudi society voicing their opposition to proposed measures against smoking, which is often viewed as a public nuisance and a huge strain on the health budget.

Al-Riyadh daily reports on the decisive proposal to impose a sin tax on tobacco to gradually double prices and discourage consumption.

Opponents of the price hike argue young men and women who smoke will suddenly find it difficult to afford a pack of cigarettes and may thus engage in illegal practices such as theft to buy cigarettes. Supporters of the proposal say cigarettes are a gateway drug that may lead to more serious addictions and have called on the government to restrict access. They believe that such a move will reduce overall tobacco consumption and stress that any move to increase prices should be followed with awareness campaigns that utilize modern technology to encourage people to give up smoking.

The Anti-Smoking Society (Naqaa) has exerted great efforts and helped many smokers, both men and women, kick the habit. It is also one of the most vocal supporters of doubling tobacco prices.

Tobacco use causes lung cancer and heart disease. Globally, 6 million people die every year as a result of tobacco use while 600,000 die because of second-hand smoking. Some official reports expect tobacco-related fatalities to jump to 8 million by 2030 if strict measures are not taken to fight smoking.

“The Kingdom has designed numerous strategies to curb smoking. In fact, we are one of the first countries that became a signatory to the World Health Organization (WHO) Convention on Tobacco Control. One article in this convention stipulates that taxes must be increased to reduce demand for tobacco products,” said Dr. Ali Al-Wadee, supervisor of the Ministry of Health’s anti-smoking program.

“An increase in tobacco taxes can effectively reduce consumption levels and encourage smokers to give up the habit. It also helps protect children and teenagers from getting addicted to tobacco,” he added.

Abdullah Al-Darbah, public relations officer at Naqaa, agreed that the prospect of increasing tobacco taxes worries tobacco companies because it reduces consumption levels.

“Our reports show an increase in the number of male and female smokers, especially teenagers. We call for imposing a constant tax that should be increased gradually on tobacco companies. Eventually, smokers will realize that this negative habit costs them a lot of money. We want to ensure that any teenager who thinks about becoming a smoker think twice because of the high prices of tobacco,” he explained.

The Kingdom spends over SR5 billion every year on medical treatment of smoking-related diseases. According to WHO reports, a 10 percent tax increase contributes to reducing tobacco use by 4 percent in countries with high-income rates and by 8 percent in countries with middle-income rates.

“Many developed countries have regularly increased tobacco taxes over the years until the price of a single cigarette pack has reached what is equivalent to SR49,” he said while adding that Naqaa helped over 9,000 smokers kick the habit in 2014.


February 20, 2016
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