The Ministry of Finance is planning to present to the People’s Assembly next week a law implementing the increase in the sales tax on cement, iron and cigarettes, to be immediately effective, Beltone Financial said in its daily market report.
The taxes will be expedited instead of waiting for the budget law to come into effect on July 1, as was planned previously, reported Al-Masry Al-Youm.
The increments in sales taxes on the above-mentioned items were included in the new state budget law for fiscal year 2010/11, which comes into effect in July.
Vendors have been raising the prices of cigarettes and the other products, however, prior to the official increase in prices to benefit from the difference. A source at the Ministry of Finance criticized the delay in implementation, stating the increments were supposed to be implemented immediately to prevent such price manipulation in the market.
Beltone reported that parliament had approved last week an increase in the sales tax on cement, from LE 1.4 per ton for imported cement and LE 2.5 per ton for local cement, to a 5 percent tax. There was also an increase in the sales tax on iron from 5 percent to 8 percent, and an increase in the sales tax on local and foreign cigarette brands by varying degrees, raising the sale prices by a range of LE 75 – LE 1.5 per pack.
“Vendors have, however, been reducing quantities of the products in the market and selling the available quantities at higher prices, prior to the official implementation of the higher sales tax decisions,” Beltone reported.
