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Finance Ministry considers increasing cigarette prices by EGP 0.5-2 - Daily News Egypt

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Finance Ministry considers increasing cigarette prices by EGP 0.5-2

We have submitted a proposal to increase the tax on imported hookah tobacco by 175% next fiscal year, says Imbaby

The Ministry of Finance is considering increasing tax prices on cigarettes next fiscal year by a range of 50 piastres and EGP 2, within its plan to increase government revenues.

Daily News Egypt learned that the ministry is seeking to increase the tax by 50 piastres on the segment of cigarettes whose prices are estimated at EGP 13, by EGP 1 on the segment where prices range from EGP 13 and EGP 23, and by EGP 2 on the price of cigarettes of the third segment, whose prices are higher than EGP 23.

Informed sources announced that the ministry is considering several proposals to increase taxes on the prices of cigarettes by 50 piastres and up to EGP 2, according to the prices of segments.

They added that this increase will not take place with the beginning of the fiscal year that begins in July; prices will witness a different kind of increase, as a result of increasing the value-added tax (VAT) from 13% to 14% according to the law, then an increase of the imported tax later on.

Sources added that one of the proposals currently being considered is the expansion of segment prices after approving the increase decision.

The financial report of the general budget project for next year said that the taxes imposed on cigarettes will be reviewed, in order to achieve additional proceeds for the treasury. The government aims to obtain tax revenue worth EGP 54.5bn in the budget of fiscal year (FY) 2017/2018, compared to the current value of EGP 42.3bn.

Sources noted that it has decided to pass the new increases in cigarettes and tobacco prices to the parliament’s Planning and Budget Committee in order to be discussed within the draft general budget for FY 2017/2018.

For his part, Ibrahim Imbaby, head of the tobacco division at the Federation of Egyptian Industries (FEI), said that the division has made a proposal to the Ministry of Finance during the discussions taking place between the ministry and representatives of the sector to increase the prices in the first segment by 25 to 50 piastres, while the second segment expects an increase between EGP 1 and EGP 1.25, and the third segment will witness an increase bteween EGP 1.50 and EGP 1.75.

“We have demanded an increase in the prices of imported hookah tobacco by 175% instead of 150% of the sale value, with the prices of the local product being fixed. The decision must be issued with the decision to increase cigarettes prices,” Imbaby said.

He noted that the ministry’s trend to hold meetings with companies and representatives of the sector is considered a good habit adopted by the ministry for the first time to ensure the increases will not have an impact on the lower classes of society.

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