Thursday, July 24, 2014

Egypt president raises cigarette, alcohol prices to ease country's budget deficit

By Sarah El Deeb, Associated Press

Published: Sun, July 6 7:40 p.m. MDT

 An Egyptian protester smokes a cigarette during a rally in Tahrir Square in Cairo, Egypt.

An Egyptian protester smokes a cigarette during a rally in Tahrir Square in Cairo, Egypt.

(Bela Szandelszky, File, Associated Press)

CAIRO — Egypt's president has issued a decree raising the sales tax on cigarettes, beer and wine.

The decision released Sunday is the latest in a series of decrees that aim to ease Egypt's staggering budget deficit, which has hovered at around 12 percent during three years of turmoil.

President Abdel-Fattah el-Sissi, former military chief elected last month, vowed to take tough decisions to address Egypt's battered economy. El-Sissi also partially lifted subsidies on fuel, a politically sensitive issue that Egypt's previous leaders had avoided.

In Egypt, where nearly 50 percent of the population live in poverty, state subsidies on energy and basic food stuffs eat up a quarter of the budget.

The new tax increases a flat rate on local and imported cigarettes and doubles an already existing tax on beer.

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