Saudi Arabia’s Cabinet approves new tobacco license regulation

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Apart from a danger to health, smoking in Saudi Arabia is now a threat to the wallet. (File photo)
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Updated 26 May 2019
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Saudi Arabia’s Cabinet approves new tobacco license regulation

  • Annual license will cost more than $26,000
  • New measure could lead to more vaping, says expert

JEDDAH: 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 was one of the first countries to ratify the World Health Organization (WHO) Framework Convention on Tobacco Control in 2005, an ambitious plan to reduce smoking rates from 12.7 percent to 5 percent by 2030.

The Health Ministry has taken steps to curb smoking through awareness campaigns and cessation clinics. Taxes on cigarettes doubled in 2017, leading to a 213 percent increase in smokers seeking help to kick the habit in the months that followed.

Saudi restaurant owner Hassan Moriah supported the Cabinet decision, although he said customers would be hit the hardest.

“Every restaurant and café manager should be licensed to provide this service. I believe all restaurants and cafés will support this decision too, but I believe the only people who will be affected by this decision are the customers,” he told Arab News. “All outlets will raise the price of hookahs. The actual people who would be paying for it to reach SR100,000 are the customers and not the cafés. Yes, there will be people who cannot afford to pay the new prices and they may have to cut down on their hookah consumption.”

The new regulation would also affect places that were not so popular, he added.

Associate professor of history at Middle Tennessee State University Dr. Sean Foley, who is writing a book on smoking in Saudi Arabia and the wider Muslim world, said the new law was part of the Kingdom’s attempts to address a serious health crisis while also meeting a goal of the Vision 2030 reform plan to move away from non-oil revenues.

“While raising cigarette taxes is a proven strategy for reducing smoking, the new SR100,000 annual fee for Saudi restaurants to permit patrons to smoke may be even more important,” he told Arab News. “Many restaurants may not be able to afford to pay for such an expensive permit, so there is likely to be less smoking in restaurants. That would mean there will be fewer people exposed to second-hand smoke in restaurants, itself a serious problem, and existing smokers would have a powerful new incentive to quit. Studies have consistently shown that creating smoke-free areas is one of the most powerful tools to motivate and help existing tobacco users to quit while preventing new smokers from picking up the habit.”

"The academic, who has written "Changing Saudi Arabia: Art, Culture, and Society in the Kingdom" published this year, said the Kingdom had some of the highest smoking rates in the world.

He added that the problem was getting worse as the number of smokers in Saudi Arabia was expected to rise from six million to 10 million in the coming years.

He warned that while there was the danger of a rise in smuggling and other black-market activities — because of the higher costs associated with smoking — there were other challenges too.

“The real danger is not the rise in black-market activity but that Saudis will continue to switch in large numbers to a product that is currently legal to use — 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.”


High-level investment forum aims to further boost business between Saudi Arabia and Japan

Updated 18 June 2019
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High-level investment forum aims to further boost business between Saudi Arabia and Japan

  • Japan is one of Saudi Arabia’s most important economic partners

TOKYO: More than 300 government, investment and industry leaders on Monday took part in a high-level gathering aimed at further boosting business opportunities between Saudi Arabia and Japan.

The Saudi Arabian General Investment Authority (SAGIA) welcomed key figures from the public and private sectors to the Saudi-Japan Vision 2030 Business Forum, held in Tokyo.

Hosted in partnership with the Japan External Trade Organization (JETRO), the conference focused on the creation of investment opportunities in strategic sectors of the Kingdom. Delegates also discussed key reforms currently underway to enable easier market access for foreign companies.

Speaking at the event, Saudi Economy and Planning Minister Mohammed Al-Tuwaijri, said: “Today’s forum is a testimony to the success of the strategic direction set by the Saudi-Japanese Vision 2030 two years ago, which seeks to drive private-sector involvement, both by partnering with public-sector entities.”

SAGIA Gov. Ibrahim Al-Omar said: “At SAGIA, we have been working on creating a more attractive and favorable business environment in Saudi Arabia, which is making it easier for foreign companies to access opportunities in the Kingdom.”

Japan is one of Saudi Arabia’s most important economic partners. It is the Kingdom’s second-largest source of foreign capital and third-biggest trading partner, with total trade exceeding $39 billion.

JETRO president, Yasushi Akahoshi, said: “Saudi-Japan Vision 2030 has made great progress since it was first announced. Under this strategic initiative, the number of cooperative projects between our two countries has nearly doubled, from 31 to 61, and represents a diverse range of sectors and stakeholders.”

Since 2016, the Saudi government has delivered 45 percent of more than 500 planned reforms, including the introduction of 100 percent foreign ownership rights, enhancing legal infrastructure and offering greater protection for shareholders.

As a result, the Kingdom has climbed international competitiveness and ease-of-doing-business rankings, with foreign direct investment inflows increasing by 127 percent in 2018 and the number of new companies entering Saudi Arabia rising by 70 percent on a year-on-year basis in the first quarter of 2019.