TAXATION- SMOKING IN SAUDI ARABIA

Is taxation the best solution to problems caused by smoking in Saudi Arabia?



Is taxation the best solution to problems caused by smoking in Saudi Arabia?

Introduction

The number of smokers in Saudi Arabia has increased to six million, including 600,000 women. There are also 772,000 teenage smokers, including intermediate and secondary school students. Taxation is one of the most effective measures for reducing tobacco consumption. The tobacco companies oppose tax increases. More and more, they rely on the argument that higher taxes are an incentive for smuggling. (Joossens, 2009)

According to the industry, increased cigarette taxes will reduce legal sales, but not total sales (legal and illegal sales combined). They argue that increased taxes will lead to increased smuggling, resulting in less revenue for governments and undermining taxation as an effective health policy to curb tobacco consumption. (Grossman, 2009)According to Dr Mohammed Al Baddah, supervisor of an anti-smoking programme at the health ministry, cigarette smoking in the kingdom was growing at an alarming rate. (Groom, 2008)

Arabian Gulf states in general and Saudi Arabia in particular are some of the biggest tobacco importing and consumer countries in the world. Saudi Arabia tops the list of tobacco importers, according to 2007 statistics. Iran is placed second, followed by Jordan, Turkey, Morocco and Egypt. (Barford, 2009)

Increasing the price of tobacco products is arguably the most effective method of curbing the prevalence and consumption of tobacco products. Individuals who do not use tobacco may refrain from starting, and thus avoid addiction. It can also induce current users to consume less tobacco or persuade them to quit, as well as prevent ex-users from starting again. Price increases would therefore reduce the global burden of disease brought about by tobacco consumption.

In a 1999 report, the World Bank concludes that on average, a price rise of 10% would be expected to reduce demand for tobacco products by about 4% in high income countries and by about 8% in low and middle income countries. Using a model of cohort smokers alive in 1995, it is estimated that tax increases that would raise the real price of cigarettes by 10% worldwide would cause about 42 million of these smokers to quit and prevent a minimum of 10 million tobacco related deaths. These conclusions have tremendous implications for public health.

Furthermore, increases in tobacco prices affects more the behaviour of the young and the poor who tend to be more responsive to price changes than older and wealthier individuals for several reasons. Firstly, because of the addictive nature of tobacco, long term users are less able to curb consumption and therefore adjust less rapidly to changes in tobacco prices, compared to younger individuals who may not yet be addicted to nicotine. Secondly, youth smoking is said to be determined more by peer behaviour than adult smoking—that is, an increase in price will first reduce the number of young smokers; then, through less peer smoking, it will again reduce the number of young smokers, hence multiplying the effect of price ...