CAIRO – 21 November 2017: The new prices of cigarettes will increase budget revenues LE 4 billion ($226.4 million) by the end of fiscal year 2016/17, Minister of Finance Amr El-Garhy announced Tuesday.
Speaking to Egypt Today, Garhy said the new prices will be applicable in December, highlighting that it will bring LE 8.5 billion to the budget on an annual basis.
“The expected revenues will be directed to health, education and social security programs, in addition to financing the budget deficit,” he added; noting that the new prices will help decrease cigarettes consumption.
The Parliament approved Tuesday a draft law submitted by the government to amend the Value-Added Tax (VAT) Law so as to increase cigarettes and hookah prices.
New cigarette price increases are set as follows:
• LE 3.5 for cigarettes packs priced up to LE 18
• LE 5.5 for cigarettes packs priced between LE 18-30
• LE 6.5 for cigarettes packs priced above LE 30
The new amendments sparked debates inside the parliament as some members insisted that this is not the right time for increases; however, parliament speaker Ali Abdel Aal commented: “The price increases came on the right time.”
At the time of applying the decision, a source in the Eastern Company, the tobacco arm of the Chemical Industries Holding Company, told Egypt Today that the new prices will become effective when they receive a notification from the Ministry of Finance.
The cigarettes price hikes are considered to be the third since the flotation of the Egyptian pound in November 2016. In December of that year, the price of Merit, Marlboro and LM cigarettes rose by 10 percent; equal to LE 20 per cartridge and LE 2 per pack.
In July, the Eastern Company raised the price of three cigarette brands by 4.2 – 17.6 percent (LE 0.50 – LE 2.25; $0.028 – $0.126).