Shisha smoking (using a water-pipe, narghile or hookah) is a popular pastime in the country. The new tax will be applied even to non-smokers if they visit a restaurant that serves shisha.
Some restaurants have already stopped offering shisha, while others have lowered their prices.
The government’s official gazette said this month that the tax will apply to all products that have tobacco. However, the ministry explained the ruling will apply “to the total invoice of the business serving tobacco products.”
Arabic hashtag “tax on hookah restaurants” is currently trending on social media networks, with customers posting photos of their restaurant bills. The bills demonstrate the initial amount more than doubles when taking into account the new 100 percent tax and a still-unpopular five percent value added tax which went into effect last year.
The new measure comes in addition to others, like cutting subsidies on fuel and power and imposing new taxes including on cigarettes, soft drinks and energy drinks.
According to some people, the new tax could be a measure to protect public health.
“This is an indirect way to prohibit shisha without actually prohibiting it,” one Twitter user said.
Another pointed out the decision goes against the country’s Vision 2030 ambitions to change its ultra-conservative image and revamp the economy.
Saudi columnist Bassam Fatiny criticized the size of the tax as ill-considered.
“Let us assume that tax on tobacco has environmental and health benefits, is it logical that it be 100 percent!” he said on Twitter. “The ministry must have misunderstood Vision (2030).”
لو أردنا جذب استثمارات العالم
فيجب علينا أولاً أن نكون بيئة جاذبة للمستثمر لا طاردة
ومن الغريب أن تقوم جهة بإشهار سلاح الضريبة لزيادة دخلها دون دراسة واقع السوق،وإذا افترضنا جدلاً أن فرض ضريبة على التبغ لها جوانب بيئية وصحية الخ لخ
فهل من المنطقي أن تكون ١٠٠٪!#ضريبة_مطاعم_التبغ— بسام فتينيBassam Fatiny (@bassam4071) October 12, 2019
Opening the country to tourism and encouraging investment is central to Crown Prince Mohammed bin Salman’s Vision 2030 reform program to wean the Saudi economy off oil.
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