CAIRO: The money generated from raising sales taxes on cigarettes and tobacco products will be directed to finance and improve the state’s health care programs for the poor, said Cabinet spokesperson Hussam al-Qawish.
In a phone call with al-Mehwar TV Monday, Qawish said that “the total revenue of sales taxes on cigarettes and tobacco products after the latest increase would reach 5.5 billion EGP ($670 million) every year.”
The money generated from the cigarettes sales tax hikes will allow the General Authority for Health Insurance (GAHI) “to introduce new services, carry out more expensive operations for intractable diseases and increase the number of beneficiaries,” said Qawish, adding that even with the new hike in cigarette prices, Egypt still has one of the lowest rates of sales taxes on cigarettes and tobacco in the world.
Chairman of GAHI Ali Hegazy said the hike would increase the budget of the authority to 8.5 million EGP per year, according to Youm7.
“Tobacco use can increase poverty as funds are diverted from spending on basic necessities like food, housing, education and healthcare to spending on tobacco products,” according to Hegazy.
According to the new prices, an increase of 0.5 EGP or more on brands officially sold at or below 10 EGP per pack, such as the popular Cleopatra brand, as their fixed sales tax hiked to 2.25 EGP, compared to 1.75 EGP.
Meanwhile, local and foreign brands with an official retail price between 10-16 EGP will see a price hike of at least 1 EGP per pack. Further, prices of the expensive brands sold at more than 16 EGP will jump by at least 1.5 EGP per pack.
Last July, Egypt’s then newly-elected president Abdel Fatah al-Sisi raised taxes on cigarettes and alcohol-by up to 200 percent.