Egypt to raise cigarette prices annually by 12% over the next three years
Egyptians will have to pay a higher price to satisfy their smoking pleasure over the next three years.
The Egyptian House of Representatives approved new legislation on Sunday, which will increase the minimum and maximum retail price thresholds for cigarettes by 12 per cent annually over three years, starting on November 5 this year.
The amendments raise the maximum retail price for local cigarettes sold for less than EGP38.88 (US$0.78) to EGP48 (US$0.97). Cigarettes priced between EGP38.88 and EGP56.44 (US$1.14) will now fall within a new range of EGP48 to EGP69 (US$1.39). Imported cigarette brands that were previously priced up to EGP56.44, have been raised to EGP69.
The law also introduced a significant change to the taxation of alcoholic beverages, shifting from a percentage-based system to a fixed-rate structure. Taxes will now be levied based on alcohol content, with an annual increase of 15 per cent for three consecutive years.
The price rise is part of the government's efforts to expand the tax base and raise public revenues amid ongoing financial pressures.
Egypt has a high number of smokers, although the Central Agency for Public Mobilisation and Statistics (CAPMAS), recently announced on World No-Tobacco Day, that it estimated that 14.2 per cent of Egyptians aged 15 and above (nearly 10.3 million people) are smokers.
The number has decreased from 17 per cent in CAPMAS' 2021/2022 survey.
CAPMAS' 2023/2024 Income and Expenditure survey revealed that Egyptian households spend an average of EGP12,900 (approximately US$260) annually on smoking. It noted that while wealthier families allocate more money to smoking, poorer households bear a heavier relative burden.
The highest average spending was recorded in the wealthiest income bracket, which averaged EGP16,200 (US$327) per year on tobacco, while the lowest-income households spent EGP8,500 (US$171.5) annually. That meant smoking consumed a larger share of total expenditures for poorer families, up to 10.2 per cent of income for the lowest bracket.
As per CAPMAS, the minimum monthly wage in Egypt is EGP6,000 (US$121).
Eastern Company SAE, in which UAE's Global Investment Holding acquired a 30 per cent stake in September 2023 for US$625 million, is Egypt's biggest cigarette manufacturer and one of the largest in the world.
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