Gulf Cooperation Council finance ministers are discussing a 100 per cent increase in duty on tobacco products.
Gulf Cooperation Council finance ministers are discussing a 100 per cent increase in duty on tobacco products.

GCC hike in tobacco prices will see rise in illicit trade, experts warn

DUBAI // Doubling the tax on cigarettes will lead to a rise in illicit trade and young people falling prey to smuggling gangs, experts have warned.
As GCC finance ministers deliberate on a 100 per cent increase in duty on tobacco products, a report was published today showing the move would cause the growth of an illicit trade police and Customs could not control.
And the paper says there is no evidence that doubling the duty will significantly cut the number of people who smoked.
The World Health Organisation (WHO) has said a 10 per cent price increase in tobacco tax in a high-income country would result in a 4 per cent reduction in smoking levels.
But Maj Khalid Al Hassan, head of the anti-forgery section of the economic crimes division at Dubai Police and one of the publishers of the paper, said the reduction in the GCC would be far lower than 4 per cent.
"The UAE is a country where the majority of the population has a high income so they don't care about a price increase," Maj Al Hassan said.
"The price of cigarettes is not expensive when compared with other areas of the world.
"A price increase may affect some nationalities with a low income but, for UAE locals and expatriates, they don't care. I don't think tax would be the solution to problem."
It is estimated that doubling the tax would increase the cost of a packet of cigarettes by 50 per cent.
In October last year health authorities and smokers closely watched a GCC finance ministers' meeting in Riyadh, Saudi Arabia, where a regional tobacco tax was debated after calls by healthcare professionals in the GCC and WHO. But no decision was reached.
The GCC first increased its tariff on tobacco imports in 1995 by 100 per cent. In the same year, the council voted to reduce nicotine content in tobacco products, and banned production of them in any GCC state.
In 2001, health ministers asked the council to increase the tariff by another 150 per cent.
The request was rejected and the council agreed to focus on other measures to combat smoking.
In the report released today, experts said a sharp rise in cigarette prices did not have any effect in six countries including Japan, Singapore and Canada.
"You have to consider that a price increase will invite people to trade in counterfeiting," said Omar Obeidat, co-publisher and partner at the Dubai law firm Al Tamimi and Co.
"If you add on top of that the issue of smuggling, which is a by-product sometimes of tax increases, you're going to have a double impact of counterfeiting increases plus smuggling increases."
Maj Al Hassan called for a phased increase on tobacco duty over five years, as was the case with the 1995 GCC decision.
A gradual approach would give Customs more time to put in place technology to help disrupt the flow of illicit cigarettes and provide valuable data to analyse smuggling trends, he said.
"If you raise tax illicit trade will begin and governments must then spend big sums of money to combat that illicit trade," Maj Al Hassan said.
"The UAE would require more resources to handle the knock-on effects at border controls."
The report says illicit trade creates uncontrolled and unaccountable markets, resulting in children being able to obtain tobacco more easily and the livelihoods of tobacco retailers are threatened.
The authors called on authorities to take the lead on educating the public against smoking and asked for more measures to protect brands and local businesses from counterfeiting.

Some of Darwish's last words

"They see their tomorrows slipping out of their reach. And though it seems to them that everything outside this reality is heaven, yet they do not want to go to that heaven. They stay, because they are afflicted with hope." - Mahmoud Darwish, to attendees of the Palestine Festival of Literature, 2008

His life in brief: Born in a village near Galilee, he lived in exile for most of his life and started writing poetry after high school. He was arrested several times by Israel for what were deemed to be inciteful poems. Most of his work focused on the love and yearning for his homeland, and he was regarded the Palestinian poet of resistance. Over the course of his life, he published more than 30 poetry collections and books of prose, with his work translated into more than 20 languages. Many of his poems were set to music by Arab composers, most significantly Marcel Khalife. Darwish died on August 9, 2008 after undergoing heart surgery in the United States. He was later buried in Ramallah where a shrine was erected in his honour.


Company name: CarbonSifr
Started: 2022
Based: Dubai
Founders: Onur Elgun, Mustafa Bosca and Muhammed Yildirim
Sector: Climate tech
Investment stage: $1 million raised in seed funding

The five pillars of Islam
Tu Jhoothi Main Makkaar

Director: Luv Ranjan

Stars: Ranbir Kapoor, Shraddha Kapoor, Anubhav Singh Bassi and Dimple Kapadia

Rating: 3/5


Edinburgh: November 4 (unchanged)

Bahrain: November 15 (from September 15); second daily service from January 1

Kuwait: November 15 (from September 16)

Mumbai: January 1 (from October 27)

Ahmedabad: January 1 (from October 27)

Colombo: January 2 (from January 1)

Muscat: March 1 (from December 1)

Lyon: March 1 (from December 1)

Bologna: March 1 (from December 1)

Source: Emirates


Company: Mascotte Health

Started: 2023

Based: Miami, US

Founder: Bora Hamamcioglu

Sector: Online veterinary service provider

Investment stage: $1.2 million raised in seed funding

The specs: 2019 BMW i8 Roadster

Price, base: Dh708,750

Engine: 1.5L three-cylinder petrol, plus 11.6 kWh lithium-ion battery

Transmission: Six-speed automatic

Power: 374hp (total)

Torque: 570Nm (total)

Fuel economy, combined: 2.0L / 100km

UAE athletes heading to Paris 2024

Abdullah Humaid Al Muhairi, Abdullah Al Marri, Omar Al Marzooqi, Salem Al Suwaidi, and Ali Al Karbi (four to be selected).

Men: Narmandakh Bayanmunkh (66kg), Nugzari Tatalashvili (81kg), Aram Grigorian (90kg), Dzhafar Kostoev (100kg), Magomedomar Magomedomarov (+100kg); women's Khorloodoi Bishrelt (52kg).

Safia Al Sayegh (women's road race).

Men: Yousef Rashid Al Matroushi (100m freestyle); women: Maha Abdullah Al Shehi (200m freestyle).

Maryam Mohammed Al Farsi (women's 100 metres).


England 228-7, 50 overs
N Sciver 51; J Goswami 3-23

India 219, 48.4 overs
P Raut 86, H Kaur 51; A Shrubsole 6-46

England won by nine runs


Director: Ali Abbasi

Starring: Sebastian Stan, Maria Bakalova, Jeremy Strong

Rating: 3/5

Most Read
Top Videos