Hike in tax on cigarettes will go to healthcare budget: Govt spokesman

Ahram Online , Monday 23 Feb 2015

Annual sales tax on cigarettes will be worth around LE5 billion after the increases

Cigarettes. (Photo: Ahram Online)
Cigarettes (Photo: Ahram Online)

The money generated by a hike in sales taxes on cigarettes -- the third increase in a year – will go towards the government’s healthcare budget, cabinet spokesperson Hossam Qawish said on Monday. 

Qawish also added in media statements that increasing the sales taxes on cigarettes complied with Egypt's commitment to the World Health Organisation's framework agreement on tobacco control through pricing and taxation.  

Egypt raised sales taxes on cigarettes on Saturday via a presidential decree published in the country's official gazette.

The most expensive cigarettes, currently priced at LE19.75 a pack but sold by most vendors for up to LE21, will see their price per pack jump by at least LE1.5.

Local and foreign brands with an official retail price between LE10 and LE16 will see a price hike of at least LE1 per pack.

Brands officially sold for LE10 per pack or under, such as Egypt's popular Cleopatra brand, will see a LE0.5 increase or more in retail price as their fixed sales tax component increases to LE2.25, from LE1.75.

Qawish stated the total revenue of sales taxes on cigarettes after the latest increase would be between LE5 and 5.5 billion annually, most of which would  be allocated to improve health care and health insurance in the public budget. 

He added that Egypt still had some of the lowest rates of sales taxes on cigarettes and tobacco in the world. 

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