Amman tobacco companies to reduce cigarette prices by 15%

Local tobacco companies have informed the Income and Sales Tax Department that they plan to reduce the prices of cigarettes by around 15 per cent in a bid to compete with smuggled cigarettes, a government source said Sunday.

The official, who preferred to remain unnamed, told The Jordan Times that local manufacturers of cigarettes have to inform the department whenever they decide to raise or reduce the prices of tobacco products, noting that smuggled cigarettes, mainly from Syria, have hit the industry.

There are seven tobacco manufacturing firms in Jordan, which have been complaining that smuggled cigarettes threaten their businesses.

Over the past few years, the government has raised taxes on cigarettes several times, which encouraged smuggling of the product, according to manufacturers.

The tax rate on local cigarettes is around 75 per cent of the value of the product.

Several shop owners told The Jordan Times that tobacco firms have almost stopped supplying them with cigarettes until the new prices are announced.

Amer Rabie, who owns a shop in the capital’s Tlaa Al Ali area, indicated that suppliers have not visited the store for days and wholesalers informed him that prices of Jordanian-made cigarettes will go down within the next few days.

Ahmad Al Sagheir also complained of a shortage of cigarettes at his store because suppliers are waiting for tobacco companies to announce their decision to reduce prices.

According to official figures, smuggled tobacco products currently account for over 40 per cent of the local market.