Revenue from tobacco has increased up to 74 %, Finance Ministry

The Kingdom's tax revenue from tobacco saw an increase of 74 per cent last year when compared to 2016. Finance Ministry data reveals that the Government earned $76 million in 2017 against $44m in 2016. Economists and financial experts say the tax revenue will rise to record level

Editorial Team Legacy

Published 13 June 2018, 8:00 · Updated 21:30

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Revenue from tobacco has increased up to 74 %, Finance Ministry

The Kingdom’s tax revenue from tobacco saw an increase of 74 per cent last year when compared to 2016. Finance Ministry data reveals that the Government earned $76 million in 2017 against $44m in 2016. Economists and financial experts say the tax revenue will rise to record levels in 2018 as the Government introduced sin (selective) tax early this year.

Speaking to Tribune, Bahrain Chamber of Commerce and Industry member Ahmed Al Salloum said, “In 2017, the Government was levying two taxes on tobacco. A special tax other than the normal tax was in place. The special tax was based on the purchase bill from the exporting country.

“In 2018 this special tax was replaced with 100 per cent selective tax. The difference is very simple. Special tax is on based on the money spent by the trader to buy a product from a foreign country, whereas selective tax is based on the selling price in the local market. Naturally, the selective tax would bring in more revenues for the Government.”

Meanwhile, it is alleged that many tobacco traders in the Kingdom are looting their customers by charging exorbitantly high prices.

Bahrain increased the import duty levied on tobacco from 100 per cent to 200pc in the beginning of 2016 as part of efforts to boost State revenues as well as in efforts to plug a substantial budget deficit.

According to studies by the World Health Organisation (WHO), a 10pc rise in the price of tobacco will lead to 8pc reduction in the number of smokers. The Ministry of Health has been pushing the Government to keep on increasing the taxes to reduce the number of smokers in the Kingdom in line with WHO Framework Convention on Tobacco Control. Bahrain joined the framework in 2007.

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Revenue from tobacco has increased up to 74 %, Finance Ministry

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