Cigarette Prices Rise in Egypt as Part of New VAT Reform

Egypt raises the minimum cigarette pack price to EGP 48 as part of a new VAT law reform. The update introduces a three-tier pricing system, annual increases through 2028, and broader tax amendments covering alcohol, crude oil, and media services, forming part of Egypt's medium-term economic plan to support public revenues and structured fiscal planning.

Jun 29, 2025 - 15:22
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Cigarette Prices Rise in Egypt as Part of New VAT Reform

Parliament Approves New Price Tiers for Cigarettes

Egypt has officially raised cigarette prices following amendments to the Value Added Tax (VAT) law approved by the House of Representatives. Ibrahim Embaby, head of the Tobacco Division at the Federation of Egyptian Industries, announced that the minimum price for a cigarette pack now stands at EGP 48, up from EGP 38.8. This update allows manufacturers and importers to adjust their pricing strategies based on a newly approved three-tier system.

New Cigarette Price Structure

The revised pricing brackets include:

  • Tier 1: Up to EGP 48

  • Tier 2: Ranging between EGP 48 and EGP 69

  • Tier 3: Starting from EGP 69 and above

These new limits represent an average increase of 12% across all pricing tiers. The adjustment is designed to offer manufacturers greater flexibility, particularly amid rising production and logistics costs.

Annual Price Increase Plan Through 2028

In addition to the immediate price restructuring, the House of Representatives has endorsed an annual increase of 12% in cigarette prices for a period of three years, beginning in November 2025. The Cabinet retains the authority to reduce this rate upon recommendation from the Minister of Finance, depending on market dynamics and production expenses.

Wider Tax Amendments Under the VAT Reform

The cigarette price increase is part of a broader economic reform package aimed at increasing state revenues while maintaining market stability. Key changes include:

  • Taxing Commercial Administrative Properties: Properties used for business purposes will now be taxed similarly to retail stores, reinforcing tax fairness.

  • Alcohol Tax Restructuring: A new fixed rate will increase 15% annually for three years, followed by a 12% annual increase, aligning with global health standards.

  • Crude Oil Taxation: A 10% tax has been introduced on crude oil, removing its previous exemption.

  • Expanded VAT Scope: VAT coverage has been extended to include advertising services and news agency operations, supporting tax inclusion and improving collection efficiency.

A Medium-Term Plan for Fiscal Stability

These measures are part of Egypt’s comprehensive medium-term economic plan, grounded in the Unified Public Finance Law. The government aims to balance revenue generation with economic growth, ensuring responsible management of financial resources without placing an undue burden on consumers or markets.