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Wed 10 Feb 2016 02:41 PM

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Bahrain warns over tobacco tax price-hikes

Traders were allegedly stock-piling cigarettes and increasing prices following new import duty

Bahrain warns over tobacco tax price-hikes
(Getty Images)

Authorities in Bahrain have announced a crackdown on traders ramping up the price of tobacco following the introduction of a new import tax on January 1.

Any retail outlet that tampers with the price of tobacco risks a maximum five-year jail sentence and/or minimum BD5000 ($ 13,272) fine for breaking the Consumer Protection Law, state news agency BNA said on Tuesday.

The announcement came following reports that the imposition of the new import tax on tobacco had prompted retailers to hoard cigarettes and overcharge customers.

Some traders were even seen displaying empty shelves, Gulf Daily News reported, forcing Bahrain’s Industry, Commerce and Tourism Ministry’s Consumer Protection Directorate to take action.

In a statement it said: “Any commercial or shopping outlets that tamper with the prices of tobacco will be held legally responsible for breaching chapter four of the Consumer Protection Law number 35 of 2012, and more specifically articles 12, 13 and 14.”

Bahrain increased the import duty levied on tobacco from 100 percent to 200 percent last month as part of efforts to boost state revenues as the kingdom works to plug a substantial budget deficit.

However, BNA reported that the price of a single packet of cigarettes would only go up by 200 fils despite the changes.

And it said the prices of US tobacco would remain unchanged under the Free Trade Agreement (FTA) binding Bahrain and the US.

Majeed Sharaf, chairman of the Bahrain Consumer Protection Society, was quoted as telling GDN: “Some cold stores and businesses started stocking cigarette cartons since last week anticipating an increase in prices and were selling them at higher prices, which is against the law.

“Consumers should be aware of their rights and not pay extra unless new prices are officially announced.”

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