07 March 2017 M Najmuz Zafar
Muscat - Oman has amended its customs provisions to levy 100 per cent service charge on tobacco and alcohol products on sale at duty-free outlets at arrivals. ROP decision 38/2017, issued last month by Lt Gen Hassan bin Mohsen al Shuraiqi, IG of Police and Customs, outlined changes in the customs provisions, including levying of 100 per cent service charge on such products.
Speaking to Muscat Daily , Dr Jawad al Lawati, rapporteur at the National Tobacco Control Committee, said that the committee had been calling for such a measure for a long time. “This new service charge is applicable at point of sale at the arrival counters of duty-free outlets. This is a good beginning as duty-free sale of tobacco products is something that WHO’s Framework Convention on Tobacco Control (FCTC) calls for banning or restricting in member countries,” said Dr Lawati.
Article 6 of the WHO Convention, encourages parties to adopt tax and price policies including restricting sales and importations of tax- and duty-free tobacco products to control use.
Dr Lawati said that GCC should adopt measures like Europe, where a person flying within the Euro Zone cannot buy tobacco products from duty-free stores. “We hope that GCC also goes in for such measures.”
He added that the price of cigarettes is very low in Oman and GCC as compared to developed countries and this difference is more apparent when it comes to duty-free prices.
Muscat Daily found out that a pack of Marlboro Red 100s cigarettes carton which costs US$49.39 at Frankfurt airport is priced almost half (RO9.40 or US$24.63) at duty free outlets in Oman. While Rothman KS Blue 200s carton is priced at RO5.60 (US$14.67) in Oman, it costs US$38.90 at the Frankfurt airport.
In a recent study published by Dr Lawati, he wrote that Oman’s tobacco imports have increased from US$48.9mn in 2008 to US$116.4mn in 2010. “Cigarettes are one of the top ten imported products and tobacco exports have more than tripled in recent years (US$21mn in 2008 to US$78mn in 2010),” stated the report.
Dr Lawati added that the tax on tobacco products is still very low in Oman even after the new excise tax (100 per cent increase) was imposed in September 2016. “Despite what appears as ‘high duty rates’, customs duties when measured as a percentage of the retail price (PRP), are in fact very low in Oman and account for less than 44 per cent of the PRP. The WHO recommends taxes to be no less than 70 per cent of the retail price.”
The high affordability of tobacco products in Oman and other GCC states is largely due to the low levels of customs duties levied and the total absence of any domestic taxes on tobacco products compared to taxes exceeding 82 per cent of retail price in Turkey and the UK, Dr Lawati wrote.
© Muscat Daily 2017