The Kingdom of Bahrain subjects e-liquid to excise tax
The Kingdom of Bahrain has introduced an excise tax on nicotine containing liquid used in electronic cigarettes and e-shisha. The tax was implemented with little prior discussion in July when Customs authorities informed vape shop owners that their imported liquids could not be cleared before the tax was paid.
The move comes after the Finance authorities classified e-liquids as tobacco and thus, subject to excise tax. Bahrain is one of three Gulf States along with Saudi Arabia and the United Arab Emirates to levy excise on tobacco products. The rate is 100% of the pre-tax price, which means an effective rate of 50% of the retail selling price.
Vape shop owners in Bahrain quickly protested the tax claiming that e-cigarette liquids do not contain any actual tobacco leaves. Many feared for the future of their business, especially those who had become regional suppliers to businesses in other GCC countries.
Despite a past history of harmonizing tax policies there are no signs that other GCC member states are planning to introduce taxes on e-liquids in the near future.