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Rabat – In a recent decision that will impact the pockets of smokers in Morocco, the Commission for the Approval of Manufactured Tobacco Product Prices has declared an imminent increase in cigarette prices, effective January 1, 2024.
The commission, overseen by the Ministry of Finance, recently convened to determine the new pricing structure, announcing that each cigarette pack will witness an increment of 1 to 2 dirhams, varying across brands.
This development aligns with the tax reforms outlined in the 2022 budget, which charts a progressive trajectory for the domestic consumption tax (TIC) on tobacco from 2022 to 2026. The specific TIC quotient is slated to rise from 100 Moroccan dirhams in 2022 to 550 dirhams in 2026.
Functioning on a biannual schedule, the Commission for the Approval of Manufactured Tobacco Product Prices plays a pivotal role in setting tobacco prices in Morocco.
Its decisions bear significant consequences not only for smokers but also for industry operators, who find themselves navigating an increasingly regulated landscape.
In the fiscal year 2023, the state anticipates collecting approximately 12.5 billion dirhams in domestic consumption tax on manufactured tobacco, surpassing the 11.8 billion Moroccan dirhams garnered in 2022, marking a notable 5.82% increase.
This surge in revenue directly targets smokers and industry operators who seemingly weather economic downturns unscathed. In concrete terms, the state aims to collect a minimum of 742 dirhams per 1,000 cigarettes in TIC, compared to the 706 dirhams collected in 2022.
Industry operators, left with little recourse, must pass on the government-mandated hike to consumers. Failure to do so may result in financial penalties, reminiscent of the scenario in 2019 when numerous operators faced fines ranging from 500 million to one billion dirhams.
