The excise tariff and customs legislation in Saudi Arabia are controlled by the department of Customs which is the official government agent in tariff revenue collection. The excise tariff in Saudi Arabia is imposed on specific imported and locally produced goods at different percentages (Shoult, 2006).
Saudi Arabia Excise Tariff Description
The excise tariffs in Saudi Arabia are established under “The Customs and Excise Act”. Numerous classes of goods are described in different chapters of the act whilst their different excise rates are stated in specific sections. The act states that any product or service listed there in shall correspond to the respective mentioned rate. An example of an item subject to the excise tariff and mentioned in the act there in is tobacco and its substitutes. This commodity is listed in chapter four sections 24 of the Act. The item is broken down into different categories where each is given a distinctive description after assignment of special item numbers. For example, tobacco under item number 2402 is described as cigars, cheroots, cigarettes and cigarillos, under item number 2403 it is described as tunbac that is pressed or chopped for the purpose of sale (Saudi Customs, 2011).
The excise rate for tobacco in Saudi Arabia is 100% under various explicit specifications for the product and its substitutes. The rate is ad valorem since it is assessed in respect to the value of the tobacco products. The rate considers the aggregate total cost incurred on the product upon entry in the country. All tobacco products are subject to the same rate. The respective taxable value and unit of quantity that is subject to excise is 100 Riyal for each 1000 unit package (Saudi Customs, 2011).
According to Shoult (2006), the excise tariff legislation on tobacco in Saudi Arabia aims at preventing and reducing entry and consumption of the product in the country.