Egypt's El-Sisi raises sales tax on cigarettes and alcohol

[DJKeefy]

Cigarettes will now cost around LE2 more per pack, while taxes on beer and wine are set to go up by 200 and 150 percent, respectively.

Local and imported cigarettes and alcohol will cost more as of Monday, after Egypt's president Abdel-Fattah El-Sisi decided to raise sales taxes on both, according to the state's official gazette.

Under the new taxes, a pack of local cigarettes priced at LE9 will go up by LE1.75, those selling between LE9 and LE15 will increase by LE2.25, while those costing more than LE15 will be levied by LE2.75.

Accordingly, a pack of Cleopatras, the cheapest and best-selling Egyptian cigarette, will cost between LE8.00 and LE8.75, compared to LE6.25 and LE7.00.

Medium-priced brands like L&M will be offered by retailers at LE14.25, up from LE12 per pack.

High-price brands like Marlboro will be sold at LE19.75 per pack, compared to LE17.

Imported brands will see the same increases as well as a rise of 50 percent of its retail price. For example, a pack of Dunhills will be sold at LE27.25 instead of LE17.

It's not the first time cigarette prices have been raised this year. The finance ministry upped the cost in February by LE0.5 to LE0.75 for local brands and LE1 to LE1.5 for imports.

As for alcohol, taxes on local and imported beer will see a 200 percent increase, with a minimum of LE400 per 100 litres – or LE0.83 per 330ml bottle of Stella beer.

Taxes imposed on wine and spirits will register a 150 percent increase (minimum of LE15 per litre).

El-Sisi's decision has not clarified the projected revenues from both commodities.

Revenues from sales taxes are expected to reach LE118.4 billion in fiscal year 2014/15, up from the proposed amount of LE92 billion in the past fiscal year 2013/14, according to government figures.

In December 2012, president Mohamed Morsi issued similar price increases on cigarettes and alcohol but retracted them following a public backlash and ordered the government to carry out "social dialogue" on the measures before their implementation.

Source: http://english.ahram.org.eg/News/105608.aspx

[LovelyLadyLux]

Taxes are very easily avoided by non-use of these commodities. Simple and easy peasy.

[Chocolate Eclair]

All luxury items, many countries use VAT for this, but President Sissi has to do something to replenish the Government coffers, that have been drained over the past 2-3 years and this is the simplest way. Its a bit like austerity measures that the UK and other European countries used to readdress their finances. Europeans had to put up with it!!

[carrie]

I agree LLL but smoking is endemic in Egypt, I just wonder if the sheesha tobacco is going to go up too that is far more dangerous than cigarettes would hate to see more of those being used.
Hope the deisel and benzine prices rises don't lead to a rise in bus fares, at the moment they are 50 piastres not a lot you may say but for some who have to get them to school and work any rise in cost affects the family budget.

[newcastle]

I agree LLL but smoking is endemic in Egypt, I just wonder if the sheesha tobacco is going to go up too that is far more dangerous than cigarettes would hate to see more of those being used.
Hope the deisel and benzine prices rises don't lead to a rise in bus fares, at the moment they are 50 piastres not a lot you may say but for some who have to get them to school and work any rise in cost affects the family budget.

I think you can expect the bus & taxi fares to increase....they already have in Hurghada. Maybe they could shelter the poorest with some form of "bus pass" .....but means testing has obvious impracticalities in Egypt.

[Dusak]

All I can say is well done Mr President. To take the bull by the horns and implement such high increases in the most widely used commodities is a brave step forwards. The population will no moan, grown and do a lot of foot stamping, but in a couple of years or so when they see the benefits of such action kick in, all will be forgiven. I hope.

As a side line to this post, I went to the duty free with my friends last night and they bought me a sleeve of L&M Blue as I couldn't buy them for love nor money on Sunday. The price? $12 which was converted to 90Le. But going off the cost of the alcohol, they had already put the extra on.

Just hope that these increases do not lead to even more low grade counterfeit cigs coming into the country, which is something he needs to get a grip of as well, but also dose not see the emergence of copy brands of beer and spirits.

[Bombay]

All I can say is well done Mr President. To take the bull by the horns and implement such high increases in the most widely used commodities is a brave step forwards. The population will no moan, grown and do a lot of foot stamping, but in a couple of years or so when they see the benefits of such action kick in, all will be forgiven. I hope.

As a side line to this post, I went to the duty free with my friends last night and they bought me a sleeve of L&M Blue as I couldn't buy them for love nor money on Sunday. The price? $12 which was converted to 90Le. But going off the cost of the alcohol, they had already put the extra on.

Just hope that these increases do not lead to even more low grade counterfeit cigs coming into the country, which is something he needs to get a grip of as well, but also dose not see the emergence of copy brands of beer and spirits.

No they haven't it's been ridiculously high since the new shop opened.

[LovelyLadyLux]

@ Carrie - my post was actually a bit tongue in cheek as I'm quite aware of the rampant smoking and the ex-pat tipplers

If your country needs $$ then El-Sisi is going down the right path. Tax the luxury stuff.

[Bombay]

Stella has risen by 2.50le a bottle from the brewery.

[Brian Yare]

Stella has risen by 2.50le a bottle from the brewery.

Will Sinbad finally change his board, or just the bottom line where they add in tax and service?

[Chocolate Eclair]

This President to me seems to know exactly what is required, he realises that he will not get money in from the coffers via income tax because half the population I would think are not even registered has working, so the employer can get away with low wages and anything else that comes with employing someone in Egypt. A case of theres work here, as for your wages take it or leave it!
Therefore he is getting the money in from other well contributed to sources, I honestly believe this to be a good move and like previous posts, people will stamp and shout, but when they see improvements they will soon forget.

Also imaging the unnecessary motorcycle journey's it will save on you will need more than 2le in your pocket when you fill up at the benzine stations from now on. I cannot remember where now but someone was saying that they may also bring into force an old regulation where service vehicles have to be replaced after 3 years.

The 3 things in my mind that need to be looked at and improved are:- Education, Affordable Healthcare, and Across Egypt Transport, including roads. Does anyone think that an 8am to 5pm job with a clock card system will do Luxor any good? People are set in their ways, they have been for ages, it either tourism or nothing!
The next 3 things are computerising government departments and required services to get rid of all the paperwork, followed closely by a proper and correct Electric ans Supply System that is both maintained and installed by the authority, followed again by the same for water. Has it is at the moment anyone can tap into the supplies of water and electricity they are not regulated enough. Ahmed down the road, waiter by day, Electrician by night, plumber in the morning before farming and returning to his daily cycle. It may be that he will end up a pile of dust under an electric pole one day.
The other things that need tightening up on are proper and correct monthly Electric and Water Bills not a half hearted attempt at estimating and then a massive bill 6 years later that a local person could not afford. My last electric bill was 2 months ago, my last water bill (6 of them) 4 months ago, so how can you maintain a system without controlled income to do so?