PLF 2022: low-cost cigarettes in the sights of the taxman

The price of a pack of cigarettes will increase once again. A new increase, provided by the current draft Finance Act 2022, which is part of the policy of consumer health protection, fervently defended by the government.

This is a new increase that will make tobacco consumers cringe. The price of a pack of cigarettes will soon increase, especially for so-called low-cost cigarettes. The vapotage will also return a little more expensive than today on a recommendation of the WHO which encourages countries to adopt a more restrictive regulation for electronic cigarettes, including aligning its taxation with that of conventional tobacco.

The draft Finance Act for the year 2022 provides, in fact, to increase the quota of the Domestic Consumption Tax (TIC) on tobacco and liquids used by the electronic cigarette. This is, according to the government, a measure that falls within the policy of consumer health protection.

In 2017, the amount of ICT was DH 315 per 1000 cigarettes with a minimum collection of DH 386. In 2019, it was decided to raise the minimum collection to 630 DH for 1000 cigarettes for lower priced brands. And this PLF 2021 provides for a minimum taxation on cigarettes of 782 DH for 1000 units. Similarly, it is planned to gradually increase this tax until 2026 so that the quota rises to 953 DH for 1000 cigarettes.

Successive increases in cigarette prices over the past few years have led to significant differences in tax levels on the retail price of tobacco products. The government now wants to create a competitive climate in the sector by addressing the complexity of the current taxation system. Thus, the PLF 2022 proposes to review the modalities of cigarette taxation to simplify them.

The new system should reduce the substantial price gap between cheap cigarettes and those known as Premium. According to the Executive, the aim of this approach is to give operators more visibility by providing for a progressive taxation scheme spread over several years. Another important point: the government, by proceeding in this way, hopes to encourage the relocation of the production of certain international brands in order to revitalize the national tobacco industry.

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