MUSCAT: Oman is planning to do away with customs duty on tobacco products and instead introduce alternative local taxes. There are also plans to raise the current 100 per cent tax on tobacco products to 200 percent.
The move is aimed at regulating the tobacco market and more precisely, the Free Trade Agreement (FTA) with the US, which provides for a complete duty phase-out by January 1, 2018.
Currently, Oman levies a 100 per cent customs duty on cigarettes and tobacco products. But due to rules of the FTA, all products, including tobacco, could be brought into the sultanate duty-free from 2018.
“If by then there is no system in place, all the cigarette companies will be directing their imports from the US, making the US tobacco cheaper, giving undue advantage to tobacco companies,” said Dr Jawad al Lawati, senior consultant and rapporteur of the National Tobacco Control Committee in the Ministry of Health.
“So there are plans to abolish customs duty on tobacco products and introduce alternative local taxes by which a balance could be established,” he said.
Dr Lawati added that although the authorities have agreed to increase the current tax on tobacco products from 100 per cent to 200 per cent, a final decision is yet to be passed.
“We have suggested that the customs duty be made zero and instead, introduce local taxes, something like a health tax. So the overall tax is 200 per cent.”
Dr Lawati said that although no progress has been made on passing a comprehensive tobacco control legislation, which has been pending with the higher authorities, two positive measures were taken by the Ministry of Commerce and Industry recently.
“The ministry issued decisions to ban the promotion of tobacco products and also made it illegal to offer discounts on these.”
On the need for the new legislation, he added that despite there being no effective national regulation on tobacco control, adherence has been good in the country. “There is a need to institutionalise the law rather than work on ad-hoc system.”
In an earlier interview with Muscat Daily, Dr Lawati had said that illicit trade of tobacco products was on the rise as law enforcing authorities were increasingly apprehending and seizing offenders and consignments. “Police says that illicit trade, mainly of chewing tobacco, is on the rise and consumer protection authorities have been seizing consignments of chewing tobacco more often.”
Oman is in the process of signing the Protocol to Eliminate Illicit Trade in Tobacco Products, a new international treaty under WHO’s Framework Convention on Tobacco Control (FCTC).
As part of its campaign for World No Tobacco Day, 2015, WHO has urged member states to sign the Protocol. WHO said that eliminating illicit trade of tobacco would generate an annual tax windfall of US$31bn for governments, improve public health, help cut crime and curb an important revenue source for the tobacco industry.
Margaret Chan, director general, WHO said, “The Protocol offers the world a unique legal instrument to counter and eventually eliminate a sophisticated criminal activity. Fully implemented, it will replenish government revenues and allow more spending on health.”
