Will new regulations deal a blow to Palestine’s local tobacco industry?
The Palestinian government approved a plan to regulate the local tobacco industry to increase tax revenue and end the chaos plaguing the market.
RAMALLAH, West Bank — The Palestinian government ratified a plan Feb. 28 to regulate the tobacco sector in an attempt to improve the quality of locally grown tobacco, restructure prices, protect farmers and local companies, fight tax evasion and cigarette smuggling and increase government revenue.
In the northern West Bank, especially in the Jenin governorate, hundreds of Palestinians independently plant, harvest and distribute locally grown tobacco, popularly called “Arab tobacco,” to meet the high demand driven in part by low prices. A pack of Arab tobacco sells for $1.50, while a pack of imports sells for $5.50. According to the Palestinian Central Bureau of Statistics, in April 2016, some 23.5% of Palestinian youths were smokers, with 29.5% of them in the West Bank and 14.9% in the Gaza Strip.
Louay Hanash, director general of the Customs, Excise Duties and VAT division at the Finance Ministry, told Al-Monitor that the government plan aims to organize the cultivation of tobacco in the West Bank under the supervision of the Agriculture Ministry by allowing Palestine Investment and Development, a privately owned company, to buy tobacco from farmers at a fixed price of $8 per kilo and then sell it to companies for cigarette production, packaging and distribution.
Hanash said companies will produce cigarettes subject to the control of the Health and Economy Ministries in line with regulations adopted in 2015 by the Palestine Standards Institution. They should appear on the market by May and sell for $2.15 a pack. According to current standards, a single cigarette should contain 1 milligram of nicotine, 12 milligrams of tar and produce no more than 12 milligrams of carbon monoxide.
