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Increase in Cigarette Prices in Morocco from January 1, 2024: Impact on Smokers and the Tobacco Industry
From January 1, 2024, smokers in Morocco will face an increase in cigarette prices, a decision made by the Commission for the Approval of the Prices of Manufactured Tobacco Products. During its recent meeting, the commission announced an increase ranging from 1 to 2 dirhams per pack, with variations depending on the brands.
This decision follows the reform of the internal consumption tax (ICT) on tobacco outlined in the 2022 budget law. This reform establishes a progressive taxation scheme for the period 2022-2026, with the specific amount of the ICT set to increase from 100 dirhams in 2022 to 550 dirhams in 2026.
Under the supervision of the Ministry of Finance, the Commission for the Approval of the Prices of Manufactured Tobacco Products meets every six months to set tobacco prices in Morocco. The tobacco tax remains a crucial source of revenue for the state budget, alongside the tax on alcoholic beverages.
In 2023, the state aims to collect around 12.5 billion dirhams in ICT on manufactured tobacco, representing an increase of 5.82% compared to the 11.8 billion collected in 2022. This increase has direct implications for smokers, who will face increased financial pressure, and for industry operators, compelled to pass on this hike under the threat of severe financial sanctions.
In terms of value, the state aimed to collect at least 742 dirhams in ICT for 1,000 cigarettes, compared to the 706 dirhams collected in 2022. Industry operators are thus obligated to follow this government-mandated increase, facing the risk of substantial financial penalties, similar to those imposed in 2019 when most actors incurred fines ranging from 500 million to one billion dirhams. This decision underscores the delicate balance between the financial imperatives of the state and the economic repercussions on smokers and the tobacco industry in Morocco.