CAIRO: Cigarette prices in Egypt are not expected to increase in the immediate period, but may go up in the coming few years, said Nabil Abdel-Aziz, Chairperson and General Director of the Egyptian Eastern Company (S.A.E) for tobacco productions stated Sunday.
In an interview with Youm7, Abdel-Azizi added that the company will pay the state around 43 billion EGP ($5.49 billion) by 2015-end, compared to 30 billion EGP in 2014.
The company has signed a deal with Malawi to build a factory for tobacco productions, he said, noting that a factory for Muassel or shisha (syrupy tobacco mix containing molasses and vegetable glycerol which is smoked in a hookah) will be established in Spain to increase the exports to the European market.
“We aim to increase the value of exports to $500 million this year as its average is between $350million and $400 million,” he continued.
Egyptian Taxation Authority chairperson Abdel Moneim Mattar said that the cigarette could be subjected to tax of consumption, noting that the current taxes imposed on the cigarette will not be changed after applying the new Value-Added Tax (VAT) Law.
The government has adjourned the implementation of the new VAT law (General taxes will be imposed on services and goods) until the elections of the new House of Representatives to formally consider it. It is expected that the application of the new law would increase inflation by 3-4 percent. Egypt’s annual urban consumer inflation jumped to 9.2 percent in September from 7.9 percent in August, according to the Central Agency for Public Mobilization and Statistics (CAPMAS).
In February, the government raised sales taxes on both local and imported cigarettes by 50 percent, according to a Sunday presidential decree. Last July, President Abdel Fatah al-Sisi raised taxes on local and imported cigarettes and alcoholic beverages by up to 200 percent.
Additional Reporting by Abdel-Halim Salem and Yasime Samra.