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Saudi cracking down on smoking with fines and fees, so vaping could rise

It's getting really costly to smoke in Saudi,

Cafes and restaurants in Saudi Arabia will have to pay up to SR100,000 ($26,675) a year to sell tobacco products inside and outside their premises The Minister of Labor and Social Development recently issued an order effectively banning smoking in all workplaces and offices in the country The e-cigarette market is anticipated to reach $41.7 billion by 2024, a CAGR of 21.6% over the forecast period.

There is no question that Saudi is wasting no time fighting nicotine addictions with an all-out war on cigarette smoking.

The problem is that vaping, as an alternative for many youths, hides its own set of complications.

New Fees for cafes and restaurants

Arab News reported that Cafes and restaurants in Saudi Arabia will have to pay up to SR100,000 ($26,675) a year to sell tobacco products inside and outside their premises after the Cabinet approved a new licensing regulation.

Saudi Arabia aims to reduce smoking rates from 12.7% to 5% by 2030, as per WHO standards.

“Taxes on cigarettes doubled in 2017, leading to a 213% increase in smokers seeking help to kick the habit in the months that followed,” said Arab News.

Still, the number of smokers in Saudi Arabia could rise from 6 million today to 10 million in the coming years.

Fines

The Saudi Gazette reports Minister of Labor and Social Development Ahmed Al-Rajhi recently issuing an order effectively banning smoking in all workplaces and offices in the country.
The decision seeks to strictly implement an existing rule that is part of the Kingdom's anti-smoking law.
Passed in 2015, the legislation aims to "combat smoking by taking all necessary measures at the levels of state, community and individuals."
Punishments that will be implemented against those found to be violating rules will include a fine of up to SR5,000 ($1,350).

Taxes

Bloomberg reported that Saudi Arabia expanded an excise tax charged on tobacco to include electronic cigarettes as part of its efforts to boost non-oil revenue.

e-cigarettes and their liquids will face a 100% tax, according to a document issued by the kingdom’s tax authority.

Although crude still accounted for about two-thirds of the government’s earnings last year, non-oil revenue has been growing steadily. It jumped 46% in the first quarter compared with the same period last year largely due to higher income from taxes on goods and services, including the excise levy.

The Saudi Gazette reported that the imports of tobacco products to Saudi Arabia dropped by 43.1% last year to stand at SR1.78 billion ($0.48bn) compared to the previous year apparently due to the implementation of the excise tax. 

In 2017, Saudi Arabia imported cigarettes and tobacco products worth SR3.13 billion ($0.845bn), before the decision to levy the selective tax.
According to figures released by the Saudi Customs Authority, the country imported 8,720 tons of tobacco products worth SR500 million ($135 million) during Q1 2019.
Saudi Arabia became the first GCC country to levy the selective tax, followed by the UAE and Bahrain.

 The Kingdom imports cigarettes from more than 17 countries.

 Are e-cigarettes any better?

Saudis will continue to switch in large numbers to a product that is currently legal to use, which is vaping. While purchasing any of the products associated with vaping is illegal in the Kingdom, it is legal to vape in public and many Saudis buy vape juice and vape modules online, according to Arab News.

 According to the market research report published by P&S Intelligence, the e-cigarette market is anticipated to reach $41.7 billion by 2024,  a CAGR of 21.6% over the forecast period.

There is rising awareness of carcinogens and toxic substances present in traditional cigarettes as well as rising health concerns, coupled with the growing shift in consumer preferences demanding e-cigarettes for smokeless and ashless vaping.

“It has been observed that vaporizers are mostly used by people who have been using tobacco-based cigarettes. However, manufacturers are also attracting e-cigarette users looking for more flavours, and longer battery life for vaping devices,” says the P&S report.

Most types of e-cigarettes, including the most popular brand Juul, contain nicotine, the addictive drug found in traditional tobacco cigarettes.

According to MedicalXpress, one Juul pod contains roughly the same amount of nicotine found in 20 cigarettes (or one pack).

“Although e-cigarettes were developed in part to help adult smokers cut their tobacco-use and to provide a "healthier" alternative, no study has yet been conducted that can provide information on the long-term effects of e-cigarette use,” says MedicalXpress.

“Due to the recent dramatic increase in e-cigarette use, preliminary findings are now showing that there is a negative effect on heart and lung function associated with e-cigarette use. However, there is still no definitive answer on whether these risks outweigh the benefits of switching from traditional tobacco cigarettes.”

Teenage e-cigarette users are actually at a higher risk of smoking tobacco cigarettes compared to non-users, it added.

“More than 30% of adolescent e-cigarette users start smoking traditional tobacco cigarettes within six months,” says MedicalXpress.