Kuwait City: The prices of cigarettes will go up by 20 to 30 % once the excise tax takes effect in Kuwait.
The price hike was announced following a meeting between the Ministry of Commerce and Industry and importers of cigarettes to contain the “tobacco crisis”.
The two sides agreed to levy the tax on the old prices of cigarettes, unify prices of cigarettes at cooperative societies and cold stores and supply the market with sufficient quantities.
They also reached an agreement to go back to the previous cigarette prices once the tobacco market regains stability in Kuwait.
Under the deal, the Ministry of Commerce and Industry will also issue an edict banning exports of cigarettes and tobacco by-products to any other countries – particularly the neighbouring GCC states.
Kuwait suffered an acute shortage of cigarettes over the past days due to a big surge in demand, which pushed importers to ask for a 60% rise in prices.
According to official sources, the implementation of the Excise Tax and the Value Added Tax (VAT) has created a thriving black market in Kuwait which has not embarked on the tax levies yet.
The same sources expect the smuggling of cigarettes to neighbouring countries would continue as the difference of prices range from 60% to 90%.
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