Cigarette Price Thresholds to Rise 12% Annually Through 2028
New VAT amendments will raise cigarette price thresholds by 12% annually until 2028 and introduce fixed-rate taxation on alcohol, aligning levies with alcohol content.
Minimum and maximum retail price thresholds for cigarettes are set to rise by 12% annually over the next three years, beginning November 5th, 2025. The adjustments were introduced as part of efforts to enhance tax equity and increase public revenues, under newly approved amendments to the Value Added Tax Law (Law No. 67 of 2016). The annual rate may be revised downward in response to fluctuations in production costs.
Cigarettes currently priced below EGP 38.88 will fall under a new maximum retail threshold of EGP 48. Those priced between EGP 38.88 and EGP 56.44 will be reclassified within a bracket capped at EGP 69. Imported brands previously subject to a cap of EGP 56.44 will also be included under the EGP 69 ceiling. These thresholds will continue to rise at a rate of 12% per year through 2028.
Taxation on alcoholic beverages has also been restructured under the amendment, with a shift from percentage-based levies to fixed rates determined by alcohol content. These levies will increase annually by 15% over a three-year period.
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