New taxes have Egyptian smokers fuming
As part of a new VAT bill aimed at reforming the country’s fiscal policy, the Egyptian government hikes up taxes on cigarettes and tobacco for the third year in a row, raising concern among smokers of limited income who now must choose between paying more or quitting.
After years of work, the Egyptian Ministry of Finance has finally announced completion of the value-added tax (VAT) bill. It has been submitted to parliament and is awaiting approval. Once ratified, the new legislation will replace the General Sales Tax Law in force since 1991.
The Cabinet’s keenness to expedite the implementation of the VAT bill for the most part is an attempt to boost state revenues in order to face imminent economic crises, mainly budget deficits. The bill also is driven by the need to reform fiscal policy.
The submission of the bill to parliament for discussion and ratification provoked immediate controversy among lawmakers, since the bill, if passed, would impose more financial burdens on Egyptians and end consumers of goods and services. For instance, the prices of tobacco products would face a 50% hike under the bill.
In recent years, the government has been raising taxes on tobacco products as part of an anti-smoking campaign under the slogan “Those who oppose should quit.”
