Egypt's smokers hit with new tobacco tax as government combats high smoking rates

CAIRO (AP) — Egyptian smokers saw prices surge Thursday by as much as 100 percent as the government slapped new taxes on tobacco products in a bid to curb smoking and raise money for public health programs in the Arab world's most populous nation.

As part of a new law passed in May but only being implemented now, the taxes raise the price of cigarettes by as much as 40 percent, while the tobacco used in Egypt's ubquitous water pipes, known locally as shisha, now costs twice as much.

The law is part of government efforts to curb smoking, which many Egyptians maintain is one of the few remaining affordable pleasures in a country where rising prices have sparked protests over the past few months.

Government officials say that the move is needed to help convince Egypt's millions of smokers to kick their habit. World Health Organization figures show the number of smokers in the country has grown over twice as fast as the population over the past 30 years.

WHO figures show that around 40 percent of men in Egypt over the age of 15 use some form of tobacco, while 82 percent of daily cigarette smokers consume between 16 and 20 cigarettes per day.

"Some people will be angry for some time, but I think it will decrease the consumption of tobacco," said Sahar Labib, the director of the Ministry of Health's tobacco department, adding that the increase in cigarette taxes was likely to elicit a stronger reaction because the tobacco used in the water pipes is still quite cheap.

At one of Cairo's many corner shops selling cigarettes, owner Hani Ishaq said on just the first day the tax had already had an effect.

"I've noticed a drop in people buying cigarettes today," he said. "I smoke, and with this 40 percent increase, I would probably buy half the cigarettes I would normally."

"I hope this does not effect the shop too much," he added.

Premium cigarettes such as Malboro Lights climbed to $2 per pack, up from &1.65, while Cleopatra brand, the iconic Egyptian classic where wood chips were once as prevalent as tobacco, now cost $0.80 per pack, up from $0.54.

Labib said the new taxes are expected to generate about $345 million in additional revenue for the government, and will be used to help improve Egypt's public health system. The money is also aimed at partially offsetting the planned reduction in subsidies that consume about 25 percent of total government spending.

Critics say Egypt's health care system is severely underfunded. WHO figures showed that the country's per capita spending on health in 2007 was roughly $106, compared to per capita spending of $7,439 in the U.S.

The new tax is the latest measure by the government to help Egyptians kick the habit. The coastal city of Alexandria — Egypt's second largest city — recently announced it would finally enforce a long standing ban on smoking in public places.

The ban, which is slated to be enforced on Sept. 11, will spread to the rest of the country over the next five years.

"International experience has proven that when you increase (cigarette prices) by about 10 percent, it may help decrease the number of smokers by 7 percent," said Mohamed Ghamrawy, the World Lung Foundation regional spokesman in Cairo. "We hope that it will help a lot of smokers start to quit."