There are to be no increases in the retail prices of cigarettes, according to Egyptian Tax Authority head Mamdouh Omar. He added that manufacturing and import companies for the goods will be responsible for setting the selling price and informing the tax authority to determine the requisite taxes, amounting to 50% of the selling price in addition to EGP 1.25 for each pack.
The remarks follow Minister of Finance Ahmed Galal’s Monday statement announcing the selling prices of domestic and imported cigarettes.
Omar said that authority had recently noticed increases in the cigarettes selling prices, which manufacturing and import companies aware of, which ranged between EGP 0.5 and EGP 2 per pack.
Omar added that around EGP 3bn in profits went directly to retailers without being taxed.
According to the finance minister, a pack of Parliament cigarettes will cost EGP 19. The brand is the first on the pricing list and is produced by international tobacco company Philip Morris.
A pack of imported Marlboro and Merit, also produced by Philip Morris, along with British American Tobacco’s (BAT) Dunhill, Kent and Kent Nanotek will cost EGP 17 each.
The L&M and Rothmans packs, also imported brands of cigarettes, will cost EGP 12, while the Next pack will cost EGP 11.5.
Original and light Viceroy Cigarettes will cost EGP 9. Meanwhile, locally produced Super Star and Cleopatra cartons are said to cost EGP 7.
The prices of locally produced cigarettes listed range between EGP 6 and EGP 2.
Omar said that the public should inform the tax authority if they were sold cigarettes with prices higher than the ones listed.
In April 2013, merchants said prices for cigarettes produced outside Egypt rose by EGP 1 to EGP 2, reaching an average of EGP 14. However, a government official denied such allegations: “If cigarette prices have risen, then it is simply a move by greedy traders, since the price of the US dollar has jumped recently.”
In 2012, a study conducted by BAT revealed that Egypt loses EGP 4bn annually due to the trade of illicit cigarettes, which is rapidly increasing in the lower-cost brands. The report indicated that the increases in cigarette prices led to the smuggling of more than 100 low-cost brands in 2011.
In turn, higher levels of smuggling resulted in a 3% loss in the country’s budget deficit during 2012.