Egypt Adds New Tax on Tobacco

The taxes increased cigarette prices by as much as 40 percent and the cost for water pipe tobacco doubled.

July 06, 2010

CAIRO ?" Egypt placed new taxes on tobacco in an effort to reduce smoking and to fund public health initiatives, the Associated Press reports. A May law took effect July 1 and raised cigarette taxes by as much as 40 percent while the cost for water pipe tobacco doubled.

The Egyptian government wants to lower smoking rates in a country that has millions of smokers. The World Health Organization (WHO) estimates the number of Egyptian smokers has advanced more than twice as quickly as the population during the past three decades. About 40 percent of Egyptian men older than 15 use some tobacco, while 82 percent of daily cigarette smokers light up between 16 and 20 cigarettes each day, according to WHO figures.

"Some people will be angry for some time, but I think it will decrease the consumption of tobacco," said Sahar Labib, director of the tobacco department at Egypt??s Ministry of Health.

Already shop owners are reporting a drop in business. "I??ve noticed a drop in people buying cigarettes today," said Hani Ishaq, who owns a corner shop. "I smoke, and with this 40 percent increase, I would probably buy half the cigarettes I would normally."

The new taxes are estimated to bring in around $345 million in revenue for the government, with the funds being earmarked for the country??s public health system, said Labib. Some of the money will be used to offset lower subsidies that take around a quarter of total government spending.

Meanwhile, Alexandria?"the country??s second biggest city?"said it would begin implementing a smoking ban in public places that has been around for a long time. The ban will go into effect on Sept. 11 and will eventually encompass the entire country by the year 2015.

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