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Sunday, 7 July 2019

Egypt’s FinMin studies increased tax rates for cigarettes

EXCLUSIVE- Cigarette prices may rise soon thanks to a potential tax increase: The Finance Ministry is studying a proposal to increase the fixed tax on cigarette packs, two government sources told Enterprise over the weekend. The increase could range between EGP 1.5 to 2, the sources estimate. As the law stands, the rates are EGP 3.50 for packs sold at less than EGP 18, EGP 5.50 for packs costing between EGP 18 and 30, and EGP 6.50 for packs priced over EGP 30. Cigarettes are also subject to a separate 50% levy on their end-user price.

How will the increase be applied? Representatives from tobacco companies the ministry met with suggested setting new rates based on whether the cigarettes are imported or produced locally. The ministry will study the “legal and financial implications” of the proposal, and decide whether to make the switch from taxing based on the cigarettes’ selling price. The proposed change will be drafted and referred to the Madbouly Cabinet “within days,” the sources said.

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