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Food is taxed under Saudi’s 100% shisha levy

Shisha pipes on a bar top in 2008[Wikicommons]

A decision to impose a 100 per cent tax on bills at venues that serve shisha has been met with criticism on social media in Saudi Arabia.

Confusion as to how the tax is to be applied has added confusion, as the new tax will apply to all patrons irrelevant of whether they have ordered shisha.

Reportedly, some restaurants have begun lowering their prices while others have decided to stop offering shisha altogether.

READ: Lebanon backtracks hours after imposing taxes on internet calls

The kingdom’s official gazette declared this month that the tax will apply to all tobacco products, although the Ministry of Rural and Municipal Affairs explained that the ruling will only apply to “the total invoice of the business serving the tobacco products”.

The decision sparked furore on social media where the Arabic hashtag “tax on hookah restaurants” was trending in the kingdom with some people posting photos of their restaurant bills, with totals of more than double the initial amount when taking into account the new 100 per cent tax and five per cent value added tax which went into effect last year.

One such user was Saudi columnist Bassam Fatiny who criticised the ruling: “Let us assume that tax on tobacco has environmental and health benefits, is it logical that it be 100 percent!” he said. “The ministry must have misunderstood Vision (2030).”

In reference to Crown Prince Mohammed Bin Salman’s so-called Vision 2030 reform programme which seeks to modernise and open up the kingdom to foreign investment and tourism in a bid to wean the Saudi economy off its dependency on oil.

READ: Saudi Arabia cuts domestic gasoline prices

Middle EastNewsSaudi Arabia
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