Bahrain considering tripling its tax on tobacco products; business industry says move would violate free trade agreement with US

, May 18, 2014 () – Bahrain is considering tripling its tax on tobacco products in a move the business industry claims would violate a Free Trade Agreement with the US, according to Gulf Daily News.The Bahrain Chamber of Commerce and Industry (BCCI) says the country would lose BD100m ($265m) in tobacco sales each year if it went ahead with a planned increase in prices of 100-300 percent.The tax would hit coffee shops, duty free stores and the wider retail sector, the chamber said.BCCI member Khalid Al Ameen said the government needed to balance the interests of traders and state treasury, as well as health concerns.International tobacco companies have reportedly threatened to sue the kingdom if it pushes ahead with plans to triple the tobacco tax, claiming it would violate a FTA with the US.Tobacco company executives and dealers and a visiting US Trade Department official reportedly met in Bahrain earlier this week to discuss the planned tax hike.The Gulf has one of the highest rates of tobacco sales, with few restrictions or taxes on the product, while Western countries have moved to ban smoking in public areas, introduced compulsory health warnings on packages and implement significant taxes.

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