The introduction of tobacco excise taxation in the Gulf Cooperation Council Countries: a step in the right direction of advancing public health
Abstract Background The Gulf Cooperation Council (GCC) countries relied, until recently, solely on import duties for tobacco products. The agreement for the introduction of an excise and value added tax (VAT) in 2016 and 2017, respectively, in most GCC countries, was a major breakthrough for public...
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| Format: | Article |
| Language: | English |
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BMC
2022-04-01
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| Series: | BMC Public Health |
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| Online Access: | https://doi.org/10.1186/s12889-022-13190-0 |
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| author | Sofia Delipalla Konstantina Koronaiou Jawad A. Al-Lawati Mohamed Sayed Ali Alwadey Ejlal F. AlAlawi Kholoud Almutawaa Amal H. J. Hussain Wedad Al-Maidoor Yahya M. Al-Farsi |
| author_facet | Sofia Delipalla Konstantina Koronaiou Jawad A. Al-Lawati Mohamed Sayed Ali Alwadey Ejlal F. AlAlawi Kholoud Almutawaa Amal H. J. Hussain Wedad Al-Maidoor Yahya M. Al-Farsi |
| author_sort | Sofia Delipalla |
| collection | DOAJ |
| description | Abstract Background The Gulf Cooperation Council (GCC) countries relied, until recently, solely on import duties for tobacco products. The agreement for the introduction of an excise and value added tax (VAT) in 2016 and 2017, respectively, in most GCC countries, was a major breakthrough for public health. There is, however, ample room for improvement. Methods The study examines the outcomes of tax reforms, for both public health and public finances, based on the World Health Organization (WHO) recommendations and best practices worldwide. Tax simulations were performed using the WHO TaXSiM model. The study is based on data from Saudi Arabia, the only GCC country for which sufficient data existed. Results We recommend a stepwise tax reform, which involves increasing the current ad valorem excise tax rate, phasing out import duties keeping total tax share constant and introducing a minimum excise, and finally switching to a revenue-neutral specific excise. Specific excises must be adjusted for inflation and income increases. If implemented, cigarette tax reform simulations show that the recommended reforms would lead to a higher than 50% increase in cigarette prices, 16% reduction in cigarette sales and almost 50% increase in total cigarette tax revenue. A significant number of cigarette-related deaths would be averted. Conclusions The recommended tax reforms are expected to lead to significant improvements in both public health and tobacco tax revenues. Our results provide useful insights that are of relevance to the whole GGC region. The effectiveness of the reforms, however, requires a strong tax and customs administration, including the establishment of a good database to monitor and advance public health. |
| first_indexed | 2024-12-10T11:25:29Z |
| format | Article |
| id | doaj.art-2adc824e50b7411081d880b13a24ff57 |
| institution | Directory Open Access Journal |
| issn | 1471-2458 |
| language | English |
| last_indexed | 2024-12-10T11:25:29Z |
| publishDate | 2022-04-01 |
| publisher | BMC |
| record_format | Article |
| series | BMC Public Health |
| spelling | doaj.art-2adc824e50b7411081d880b13a24ff572022-12-22T01:50:45ZengBMCBMC Public Health1471-24582022-04-012211810.1186/s12889-022-13190-0The introduction of tobacco excise taxation in the Gulf Cooperation Council Countries: a step in the right direction of advancing public healthSofia Delipalla0Konstantina Koronaiou1Jawad A. Al-Lawati2Mohamed Sayed3Ali Alwadey4Ejlal F. AlAlawi5Kholoud Almutawaa6Amal H. J. Hussain7Wedad Al-Maidoor8Yahya M. Al-Farsi9University of MacedoniaUniversity of MacedoniaMinistry of HealthGulf Health CouncilMinistry of HealthMinistry of HealthMinistry of Public HealthMinistry of HealthMinistry of HealthGulf Health CouncilAbstract Background The Gulf Cooperation Council (GCC) countries relied, until recently, solely on import duties for tobacco products. The agreement for the introduction of an excise and value added tax (VAT) in 2016 and 2017, respectively, in most GCC countries, was a major breakthrough for public health. There is, however, ample room for improvement. Methods The study examines the outcomes of tax reforms, for both public health and public finances, based on the World Health Organization (WHO) recommendations and best practices worldwide. Tax simulations were performed using the WHO TaXSiM model. The study is based on data from Saudi Arabia, the only GCC country for which sufficient data existed. Results We recommend a stepwise tax reform, which involves increasing the current ad valorem excise tax rate, phasing out import duties keeping total tax share constant and introducing a minimum excise, and finally switching to a revenue-neutral specific excise. Specific excises must be adjusted for inflation and income increases. If implemented, cigarette tax reform simulations show that the recommended reforms would lead to a higher than 50% increase in cigarette prices, 16% reduction in cigarette sales and almost 50% increase in total cigarette tax revenue. A significant number of cigarette-related deaths would be averted. Conclusions The recommended tax reforms are expected to lead to significant improvements in both public health and tobacco tax revenues. Our results provide useful insights that are of relevance to the whole GGC region. The effectiveness of the reforms, however, requires a strong tax and customs administration, including the establishment of a good database to monitor and advance public health.https://doi.org/10.1186/s12889-022-13190-0Cigarette taxexcise tax reformGCC countriesSaudi Arabiapublic health policy |
| spellingShingle | Sofia Delipalla Konstantina Koronaiou Jawad A. Al-Lawati Mohamed Sayed Ali Alwadey Ejlal F. AlAlawi Kholoud Almutawaa Amal H. J. Hussain Wedad Al-Maidoor Yahya M. Al-Farsi The introduction of tobacco excise taxation in the Gulf Cooperation Council Countries: a step in the right direction of advancing public health BMC Public Health Cigarette tax excise tax reform GCC countries Saudi Arabia public health policy |
| title | The introduction of tobacco excise taxation in the Gulf Cooperation Council Countries: a step in the right direction of advancing public health |
| title_full | The introduction of tobacco excise taxation in the Gulf Cooperation Council Countries: a step in the right direction of advancing public health |
| title_fullStr | The introduction of tobacco excise taxation in the Gulf Cooperation Council Countries: a step in the right direction of advancing public health |
| title_full_unstemmed | The introduction of tobacco excise taxation in the Gulf Cooperation Council Countries: a step in the right direction of advancing public health |
| title_short | The introduction of tobacco excise taxation in the Gulf Cooperation Council Countries: a step in the right direction of advancing public health |
| title_sort | introduction of tobacco excise taxation in the gulf cooperation council countries a step in the right direction of advancing public health |
| topic | Cigarette tax excise tax reform GCC countries Saudi Arabia public health policy |
| url | https://doi.org/10.1186/s12889-022-13190-0 |
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