Egypt hikes tax on cigarettes for third time in a year

Ahram Online , Sunday 22 Feb 2015

An increase in sales taxes on cigarettes is part of a wider trend from the state which has raised taxes to bring down budget deficit

Sale of contraband cigarettes booming on the streets of the capital (Photo: Deya Abaza)

Egypt has raised sales taxes on cigarettes for the third time in a year, according to a presidential decree published in the country's official gazette on Saturday.

The most expensive cigarettes, such as Marlboro, currently priced at LE19.75 a pack (but sold by most vendor 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.

The government maintained its 50 percent tax rate on both local and imported brands.

Egypt has seen a spate of tax hikes since last year as the government strives to bolster state revenues while cutting public spending to rein in a budget deficit which reached 12.8 percent of GDP in the fiscal year ended in June 2014.

Last July, Egypt's then newly-elected president Abdel Fattah El-Sisi raised taxes on cigarettes and alcohol-by up to 200 percent. 

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