The Riwaa platform has provided the option to activate tobacco fees, which makes it easier for you to automatically calculate them with the tax without the need to set them up manually. In this article, we explain all the details.
What are tobacco fees?
These are fees imposed by the Ministry of Municipal and Rural Affairs and Housing on licensed commercial activities to sell tobacco products, such as shisha shops or restaurants and cafes that offer them. Tobacco fees are applied based on the product price in addition to applying value-added tax.
ℹ️ Note: Tobacco products sold in grocery stores and supermarkets are not included in these fees, as they are not classified under the categories associated with the activity of providing tobacco products and their derivatives.
Important information before starting:
- When activating tobacco fees, they will be included among the types of taxes. To apply them to the products subject to them, you must later assign them to each product subject to the fees.
Steps to activate tobacco fees and assign them to products
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Go to Settings > Taxes.
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Click on the "Activate" button on the left of (VAT + Tobacco Fees).
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Click "Activate Tobacco Fees" to confirm the operation.
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The fees are activated, now go to Products and Inventory > Products, and start assigning the fees to the products subject to them.
How to calculate tobacco fees and VAT
Tobacco fees include the following:
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100%: Tobacco fees from the price of the tobacco product (a minimum of 25 riyals per tobacco unit).
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15%: VAT on the total price after adding tobacco fees.
Calculation method:
Tobacco fees are calculated based on the product price, with a minimum of (25 riyals), which is the least amount that can be paid as tobacco fees on each tobacco unit, whether sold per (piece, gram, kilo...), example:
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If the product price is less than or equal to 25 riyals, a minimum tobacco fee of (25 riyals) is applied.
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If the product price is more than (25 riyals), a tobacco fee of (100%) of its price is applied. After adding the tobacco fee to the product, a VAT of 15% is applied.
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The tobacco fees appear at the bottom of the invoice, showing the value of VAT and the value of tobacco fees.
Examples of calculating tobacco fees
Product price less than 25 riyals
Product price equals 25 riyals
Product price more than 25 riyals
Quantity
1
1
1
Product price (per piece)
Without tax
18 riyals
25 riyals
40 riyals
Tobacco fees for the product (per piece)
25 riyals
(minimum)
25 riyals
40 riyals
(100% per piece)
(Product price + Tobacco fees)
43 riyals
50 riyals
80 riyals
VAT 15% on the product price after adding tobacco fees
6.45 riyals
7.50 riyals
12 riyals
Total (including tobacco fees + VAT)
49.45 riyals
57.50 riyals
92 riyals
Frequently Asked Questions
1- Can I deactivate tobacco fees?
Yes, you can. Click "Deactivate". If tobacco fees are applied to one or more products, a list of the products with the fees will appear. First, modify the tax type for these products, then deactivate the fees.
2- How do I assign tobacco fees to a product in inventory?
You can add tobacco fees to the product when adding it to inventory manually or while uploading it via an (Excel) file.
3- Do tobacco fees reflect on the tax declaration?
Tobacco fees do not reflect on the tax declaration, as they are fees imposed by the Ministry of Municipal and Rural Affairs and Housing. The tax declaration is dedicated to taxes from the Zakat, Tax and Customs Authority and reflects VAT.
4- Do tobacco fees appear separately from VAT on the invoice?
Yes, tobacco fees appear separately from VAT within the data at the bottom of the invoice.
5- Is there a report showing sales of products subject to tobacco fees?
Yes, you can know the sales of products subject to tobacco fees through Reports > Sales Report from each invoice.