The Moroccan Finance Ministry plans to increase tobacco prices to boost revenue. From January 1, 2025, dirham prices will increase by $1 to $2 per pack. The government hopes to achieve a revenue target of about $1.4 billion by 2025.
Morocco’s Finance Ministry urges tobacco companies to raise cigarette prices
Morocco’s Ministry of Economy and Finance (TIC) reported on December 8 that revenues have stagnated and are lower than expected due to excise taxes on domestic tobacco products. The ministry is urging tobacco companies to raise cigarette prices.
Last week, an interministerial member responsible for approving tobacco prices held a special meeting to discuss the issue. The meeting noted that some companies, especially those selling high-end cigarette brands, have frozen prices to absorb tax increases implemented in the 2022-2026 fiscal reform plan. Officials say the strategy is holding back projected revenue growth.
Raising cigarette prices to increase tax revenue
Another meeting next week will be discussed with tobacco companies. The Treasury wants to agree on a price increase of 1 or 2 per pack. The price increase is expected to take effect on January 1, 2025.
At a committee meeting in November, Treasury officials expressed concern about price discrepancies. While the prices of cheap cigarette brands have increased, high-end brands have maintained their original prices, creating a “competitive distortion.” It is reported that the price of imported high-end cigarettes is lower than some local cheap brands.
The pending 2025 Finance Law estimates that tobacco tax revenue will reach Dh13.7 billion (about $1.37 billion), up from Dh12.5 billion ($1.25 billion). The government said it relies on GST as a stable source of revenue to support the budget and reduce revenue fluctuations.
Officials stressed that increasing the output of tobacco taxes is particularly important as the progressive tax plan ends in 2026. The Finance Ministry plans to present its final recommendations to Finance Minister Nadia Fettah after this month’s meeting.
Insiders noted that some companies have frozen prices to maintain market share and avoid passing the tax burden on to customers, which has intensified the internal price war in the industry. This strategy limits the government’s ability to maximize revenue.
