A report issued by the Central Auditing Organization revealed that the Moassel production plants of the Eastern Company for Tobacco Company (Eastern Company) had stopped; It is the only one in the Egyptian market in the production of cigarettes, mo’asal and the rest of tobacco products, in addition to the accumulation of the product stock prepared for sale, in addition to the presence of huge returns from mo’asal.
The report – published by the Egyptian newspaper “Al-Watan” – revealed a noticeable change in the map of smoking in Egypt, after the mo’assel production factories stopped in the areas of “Menouf, Abu Tig, Talbieh, and Muharram Bek” at the end of last March and only occasional production of some export orders, due to the accumulation of stocks. Production in stores.
The report of the Central Auditing Organization – according to the newspaper – confirmed the increase in the quantities of molasses stock in sales stores on March 31, 2021, to its highest rate this year; It reached about 484 tons at a cost of more than 16 million pounds, in addition to about 250 tons inside the company’s factories, at a cost of more than 8 million pounds.
Is Corona the reason?
The report did not reveal a specific reason behind the decline in Egyptians’ consumption of honey, and whether their decline was due to the closure of cafes for a period of time, or in response to the government’s decisions to ban “shisha” and fears of spreading the “Corona” virus among smokers, or the trend of “hookah” smokers to products Other smoke such as conventional or electronic cigarettes.
And within the framework of implementing the precautionary measures taken by the state to limit the spread of the “Corona” virus; During the past months, the Egyptian Ministry of Interior launched intensive campaigns against cafes, during which tens of thousands of “shisha” were confiscated, and thousands of cafes were closed in violation of the procedures of the Ministry of Health.
According to press releases, the Egyptian security forces – within one week in the month of May – seized more than two thousand violations of the decision to ban “shisha”, and confiscated more than 20 thousand “shisha”.
Tax and health insurance financing
Interestingly, the cigarette and tobacco sector is one of the most important tax resources for the public treasury in Egypt, and the Ministry of Finance aims to collect taxes on tobacco and cigarettes, with an increase of 4.2 billion pounds during the next fiscal year, which begins next July.
The financial statement of the general budget for the fiscal year 2021-2022 revealed that the Ministry of Finance seeks to collect 79 billion pounds through cigarette and tobacco taxes, compared to a target of 74.8 billion pounds in the current budget, a difference of 4.2 billion pounds.
The Comprehensive Health Insurance Law – which has been implemented since 2018 – provides for the collection of 75 piasters from the value of each pack of cigarettes sold in the local market – whether the product is local or foreign – in favor of health insurance, provided that this value increases every 3 years by 25 piasters until it reaches 150 piasters.
With the implementation of the new expected increase at the beginning of next month (July), the total amount deducted in favor of the General Authority for Comprehensive Health Insurance – since the beginning of the implementation of the decision – will reach about 100 piasters per pack of cigarettes.