x Abu Dhabi, UAEFriday 28 July 2017

GCC tobacco tax time has come

GCC countries have tried and failed to curb smoking. It's time to increase cigarette prices.

About 40 per cent of teenagers in the GCC smoke some form of tobacco. In Saudi Arabia, nearly a quarter of children between 13 and 15 smoke regularly. Teenagers in the UAE consume tobacco at roughly the same rate. And this, despite constant warnings that tobacco use is a leading killer of adults in the Arabian Gulf.

GCC states have, collectively and on an individual basis, tried to combat this deadly habit for years. In 1995, the countries agreed to impose a 100 per cent increase in taxes, and banned production in member states. In recent years, smoking has been banned in many places - from malls to parks to most public spaces. And still, consumption rates continue to climb.

As The National reported yesterday, Gulf finance ministers meeting in Riyadh today are once again discussing a proposal to tackle this problem - by increasing the tobacco tax by 150 per cent. Experts say the step would reduce youth tobacco consumption by making tobacco too expensive for many.

Such a dramatic tax increase will face opposition from producers. In 2001, the six states rejected a similar proposal on the grounds that any hike would lead to increased smuggling, a reasonable worry. Ministers then suggested alternative ways to combat smoking, such as reducing nicotine content in tobacco and producing tobacco locally.

But clearly, these measures have failed. A renewed GCC-wide antismoking initiative - starting with a steep tax hike - is essential.

Enforcement of anti-tobacco laws has been delayed regionally due in part to pressure from businesses and producers that worry the ban will cut into profits. In January, Dr Mahmoud Fikri, the undersecretary for health policy at the Ministry of Health, said the law was in the final stage of approval but "there are a lot of interests" to appease.

Companies may threaten to cut ties on an individual basis, but passage of a GCC-wide measure would send a strong signal that producers and retailers could not ignore. As Dr Fikri noted, "our main concern is to have legislation in agreement with all countries".

Costlier legal tobacco products will encourage black markets to emerge. That is all but certain. But smuggling can be policed. Any solution that reduces the prevalence of smoking, and discourages children from starting, is worth consideration.