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VAT Increases on Local, Imported Tobacco Products

VAT Increases on Local, Imported Tobacco Products

A shisha cafe

According to official news outlets, Egyptian president Abdel Fattah Al Sisi has approved the ratification of a law that would the Value Added Tax increase on tobacco products.

The amendments to the VAT tax law in question, no. 67 of 2016, were approved previously by the Egyptian Parliament but were pending approval from the presidential cabinet before their effective implementation.

As it stands, tobacco products are set to increase in prices, with the VAT law taking into consideration electronic cigarettes, vapes, e-liquids, heated tobacco and their derivatives, for the first time.

Photo: Getty

The price surge is explained by the state’s 2019/20 budget’s aim to profit 8.9 EGP million from smoking products, as per Al Ahram, as well as the need to regulate and unify prices among vendors.

Under the new amendments, the VAT on local cigarette products are to increase by 0.50 LE, with a 15 percent increase on shisha products. Alternatively, the VAT will increase by 1 EGP on imported cigarettes as well as 25 percent on foreign shisha products.

Moreover, Egypt’s popular syrup ‘me3assel’ tobacco mix for shisha will also see a surge an exponential surge pricing: 165 percent for local and 200 percent for its foreign counterpart.

Credit: Marwa Morgan

Egypt’s Taxation authority has also fixed prices for the sale of cigarettes, which means that kiosks and private venues must abide by the official price set to sell the tobacco products.

“The marked discrepancy in the sale of cigarettes from one store to another necessitated updating the unified price table,’’ reads a statement from the Taxation authority.

As such, “Cleopatra King “paper” cigarettes, a popular Egyptian brand for lower-income Egyptians, takes the leads for the cheapest product at 16.5 EGP while Marlboro red and Davidoff reached the cap at 40 EGP.

As with every hike in the VAT of tobacco products, the news is often met by dismay by national smokers in Egypt, where many engage in recreational ‘shisha’ smoking.

The most recent statistics, from 2013, estimate that the prevalence of daily smokers is 40.5 percent among men, 0.3 among women, and generally 20.3 percent of Egypt’s population as per the World Health Organization.

Topped with worsening pollution over the years, Egyptians find themselves struggling with pulmonary respiratory diseases and lung cancer.

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