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Tax Gap of Heated Tobacco Products in Saudi Arabia

The Kingdom of Saudi Arabia applies excise taxes on both heated tobacco and e-cigarettes. The amended law became effective in May 2019, and the tax is implemented by the General Authority of Zakat & Tax. The tax applies also applies to both heated tobacco and electronic heating devices.

The rate for all tobacco products, including heated tobacco, any e-liquids containing nicotine, and electronic devices, is an ad-valorem tax rate based on the “pre-tax” price. The “pre-tax price” is defined as 50% of the retail sales price (before VAT).

The tax is in accordance with the “Excise Tax Agreement of the States of the Gulf Cooperation Council.”

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Last Updated Feb. 25, 2021