English
FrançaisComplaint
- Complaint number
- NTB-001-155
- NTB Type
- 2.6. Additional taxes and other charges
- Complaint
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On November 3, 2023, the Egyptian Official Gazette published Law No. 177 of 2023 amending provisions of the Value Added Tax Law promulgated by Law No. 67 of 2016, including the provisions related to the tiers of cigarette taxation. The amendments to Serial 1/B of Law No. 177 of 2023 bluntly prohibits imported cigarettes from of the first tier and restricts them to “cigarettes produced by local factories”, which favors and gives preferential treatment to local products.
It is worth noting that the addition of the aforementioned provision has significant repercussions on the competitive ability of other companies, especially that the first tier has the lowest priced cigarettes in the market and are more economical for citizens. Consequently, this contradicts COMESA national treatment article, causing harm through the discrimination of specific products that may lead to market monopolization.
Various companies manufacture their brands in factories in COMESA member states and import and sell it in Egypt. However, the recent tax amendments that imposed a value-added tax on low-priced cigarettes prevent companies from importing cigarettes and limits sales to local production. - Progress update note
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1. Egypt to respond on the NTB with Zambia on the online reporting system by 1st Week of June 2024
2. During the NTBs workshop held from 17 -19 April 2024, the Egypt and Zambia agreed that this issue would form part of the agenda for the proposed bilateral meeting. The dates for the bilateral meeting to be facilitated by the Secretariat would be determined by the two Countries.
3. On 7 May 2024, Egypt Focal Point reported that consultations with the relevant national authorities were ongoing, and Egypt would provide updates as soon as possible.
4. On July 22, 2024, the Secretariat had a meeting with the exporter after receiving a reminder on the NTB dated 3rd July 2024. The aim of the meeting was to get the gist of the NTB and share other necessary information to start facilitating the resolution of the NTB.
5. As a policy issue, the NTB was escalated to Stage 1 on cooperation and elimination of NTBs under the COMESA Regulations on NTBs Elimination and on 26 August 2024, Zambia was advised to formally request the Secretariat to facilitate the bilateral meeting on behalf of the exporter. This comes after Zambia reported that she wrote to the Egyptian Embassy regarding the NTB but there was no immediate response and that was concerning as the matter was very urgent.
6. In a letter dated 2 September 2024, Zambia requested the Secretariat to facilitate a bilateral meeting between the two countries. The Secretariat has started preparation for the bilateral meeting including drafting a letter to Egypt and developing a draft agenda for the bilateral meeting between the two Member States.
7. On 24 September 2024, Zambia and Egypt convened a bilateral meeting and recommendations from the discussions as presented in the draft report were as follows"
i) Zambia will engage Roland Imperial Tobacco Company to consider selling their products under Tier 1 for favorable market conditions in Egypt.
ii) Egypt will consult with its Ministry of Health on the health requirements for importation of cigarettes and communicate with Zambia in due course.
iii) Egypt will further start the process of reviewing the Law 177 to remove elements of discrimination between imported and local products.
iv) Egypt will look into the possibility of allowing the 15 consignments in transit from the Tobacco Company to ascertain if there is a possibility of a rebate and if the rebate can be held over for the period until the Law is revised.
8. On 4th June 2025, the two Member States convened a bilateral meeting and the following updates were received:
i. Egypt is to consult with the Ministry of Finance on the NTB which has the elements of discrimination between the imported and local products; and
ii. The Secretariat to facilitate the next bilateral meeting between the two Member States, by October 2025.
9. On 25th August 2025, the representative of Tobacco informed the Secretariat that Egypt has gazetted legislative amendment to its Value Added Tax (VAT) Law in relation to tobacco under Law No. 157 of 2025, dated July 17, 2025. The key changes introduced by the amendment include:
i. Increased VAT rates on cigarettes.
ii. Structured annual increases of 12% to both minimum and maximum retail price thresholds for cigarettes, beginning November 5, 2025, and continuing through 2028.
The new cigarette price thresholds are as follows:
i. Local cigarettes priced below EGP 38.88 will increase to EGP 48.
ii. Cigarettes priced between EGP 38.88 and EGP 56.44 will increase to a range of EGP 48 to EGP 69.
iii. Imported brands priced up to EGP 56.44 will increase to EGP 69.
10. On 31 October 2025, Secretariat sent a reminder to Egypt on the outstanding discussions on the matter, however on 3 November Egypt updated that they has started taking the necessary steps to coordinate with the relevant national authorities from the Ministry of Finance and the Tax Authority to consider the proposal to amend the law. - Policy or regulatory NTB
- Yes
- Location
- Egypt: Egyptian Tax Authority (Government institution)
- Reporting Country or Region
- Zambia
- Country specific trade issue
- No
- Date of incident
- 2023-11-03
- Status
- In process
- Product Description
-
- Total value
- 0
- Date reported
- 2024-03-05 16:40
- Modified
- 2024-07-18 14:05
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