After the introduction of a 100% excise tax in 2019 put enormous pressure on demand for cigarettes, cigars and cigarillos and smoking tobacco, 2020 and 2021 saw further drops in demand, although sales declines were more moderate as stability returned to Oman’s tobacco industry. Attitudes towards smoking remain less negative than in most other countries, although the government is stepping up its efforts to educate the population about the long-term dangers of smoking and nicotine addiction.
Retail volume sales of cigarettes continued to decline towards the end of the review period, with negative growth recorded in both 2020 and 2021 after substantial volume sales declines were registered in the category during 2019, the result of significant tax hikes over the course of the year. However, cigarette volume sales declines were more moderate during 2021 in comparison with 2020 despite rising prices due to the introduction of VAT in mid-2021, as well as the impact of inflation on prices if tobacco products.
While there is growing awareness of the potential negative health effects of tobacco use and nicotine addiction in general among the population of Oman, cigarette smoking is generally accepted, especially among men and it is a common habit, especially in urban areas. The use of shisha/hookah is also common in social situations, particularly among Omani nationals and expatriates from the countries of the Levant.
While there is no domestic tobacco manufacturing industry in Oman, tobacco plays a major role in Oman's economy, with excise tax on tobacco products providing the government with substantial revenues. Oman levies a 100% customs duty on cigarettes and tobacco products and it introduced a special tax of 100% in 2019.
Oman is a country blessed with a very modern road infrastructure and most of the country’s population is concentrated in the coastal corridor between the northern Governorate of Musandam and Muscat, with one-third of the country’s population residing in the Muscat Governorate. As a result, the distribution of tobacco is fairly smooth, despite the large majority of Oman’s territory being covered in desert.
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Passport Tobacco covers the seven major tobacco categories: Cigarettes, Cigars & Cigarillos, Smoking tobacco (made up of Pipe tobacco and RYO tobacco), Smokeless Tobacco (snuff and chewing tobacco), E-Vapour Products (closed and open); Heated Tobacco; and Tobacco Free Oral Nicotine. Smoking paraphernalia such as pipes, rolling papers, lighters or matches, etc., are not included, nor are nicotine replacement therapy (NRT) products, which are part of Euromonitor's Passport Consumer Healthcare database.See All of Our Definitions
This report originates from Passport, our Tobacco research and analysis database.
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