Egypt Hiking Sin Taxes

July 7, 2014 Taxation in Egypt

Alcohol and cigarette taxes in EgyptCAIRO – Tobacco and alcohol is about to become significantly more expensive in Egypt, as the government hopes that hiking taxes on these products will help it close the national budget gap.

From July 7th the taxes levied on the sale of all alcohols and tobacco products in Egypt will be hike significantly, with some products now seeing a tax of as much as 200 percent.

The tax on tobacco products will vary based on whether the cigarettes were produced in Egypt or imported, with locally produced cigarettes now being subjected to a levy based on the retail price of the product, with packs of cigarettes costing less than EGP 9 seeing an extra charge of EGP 1.75, while those selling at a price of between EGP 9 and EGP 15 facing an additional tax of EGP 2.25, while a charge of EGP 2.75 is applied to more expensive products.

Imported cigarettes will also be subject to an additional tax of percent of their respective retail price, in addition to the same tiered levy applied to the sale of local products.

Alcohol taxes have also been raised, with a new 200 percent tax to be applied to the sale of local and imported beers, and a tax of 150 percent on the sale of any wine or spirit.

The taxes on alcohol and tobacco are intended to work in tandem with a number of other tax measured implemented by the government over the last month aimed at reducing the national budget deficit by 2 percent to 10 percent of GDP by the end of the next fiscal year.