New regulations require the application of Tobacco Fees, imposed by the Ministry of Municipal and Rural Affairs and Housing on businesses licensed to sell tobacco products. These fees are calculated based on the product price, in addition to VAT.
To ensure compliance with these regulations, Rewaa provides an option to enable Tobacco Fees, allowing for automatic calculation of fees and VAT without manual setup. This article explains how to activate Tobacco Fees on Rewaa and how they are calculated.
ℹ️ Tobacco Fees are applicable to businesses licensed to sell tobacco products, such as shisha shops, restaurants, and cafes that serve tobacco products. Grocery stores and supermarkets selling tobacco are excluded since they are not classified under activities related to serving tobacco and its derivatives.
Activating Tobacco Fees
To activate Tobacco Fees:
Navigate to:
Settings > Taxes > Click Activate to enable (VAT+ Tobacco Tax).
Confirm by clicking Activate Tobacco Fees.
ℹ️ Enabling Tobacco Fees allows them to appear as a tax type when adding products to inventory. You can assign them to applicable products as needed.
⚠️Once enabled, Tobacco Fees cannot be disabled. However, you can remove their assignment from products if needed.
Calculating Tobacco Fees and VAT
Tobacco Fees include:
100% Tobacco Fee on the product price (minimum SAR 25 per tobacco unit).
15% VAT on the total price after adding Tobacco Fees.
ℹ️ Tobacco Fees are calculated based on the product price, with a minimum of SAR 25, which is the lowest amount that can be charged as a tobacco fee per unit.
Example Calculation:
If the product price is less than or equal to SAR 25, a minimum fee of SAR 25 applies.
If the product price exceeds SAR 25, a 100% fee is applied to the product price.
After adding the Tobacco Fee, a 15% VAT is applied.
Examples of Tobacco Fee Calculations
| Less than 25 SAR | Equals 25 SAR | More than 25 SAR |
Quantity | 1 | 1 | 1 |
Product Price (per unit) (Excluding VAT) | 18 SAR | 25 SAR | 40 SAR |
Tobacco Fee (per unit) | 25 SAR (Minimum fee applied) | 25 SAR | 40 SAR (100% of the product price) |
Total Price (Product Price + Tobacco Fee) | 43 SAR | 50 SAR | 80 SAR |
VAT (15%) on the total price after adding the Tobacco Fee | 6.45 SAR | 7.50 SAR | 12 SAR |
Final Total (Including Tobacco Fees + VAT) | 49.45 SAR | 57.50 SAR | 92 SAR |
Tobacco Fees on Invoices
Tobacco Fees appear as a separate item at the bottom of the invoice, alongside VAT details.
FAQs
1- Can I disable Tobacco Fees after activation?
Once activated, Tobacco Fees cannot be disabled. However, you can unassign them from products:
Navigate to Products & Inventory > Products.
Search for the product by name or SKU.
Edit the product and change the tax type as needed.
2- How can I add Tobacco Fees to products in inventory?
You can assign VAT+ Tobacco Tax to products manually during product addition or via Excel upload.
3- Do Tobacco Fees reflect in the tax report?
No, Tobacco Fees do not appear in the tax report as they are fees imposed by the Ministry of Municipal and Rural Affairs. VAT is included in the Zakat, Tax, and Customs Authority report.
4- Do Tobacco Fees appear separately from VAT on invoices?
Yes, they are displayed as a separate line item on invoices.
5- Is there a report for sales subject to Tobacco Fees?
Yes, you can view sales with Tobacco Fees in the Sales by Invoice Report:
Navigate to Reports > Sales > Sales by Invoice.
6- How can I identify products assigned with Tobacco Fees?
From the product list: Customize columns to include the tax type.
By exporting inventory:
Go to Products & Inventory > Products > Export.
Open the downloaded Excel file, which includes a column for taxes/fees.