Cigarette Prices will Increase in 2025 Due to New Tax Reform

Rabat – Morocco will witness another increase in cigarette costs in 2025, with entry-level brands set to have the biggest price hikes.

The adjustments raise the cost of some packs by up to MAD 2 ($0.20), while premium brands face minimal or no increases

The price changes are compatible with the Domestic Consumption Tax’s (TIC) reforms on tobacco products.

The changes come as the government says it strives to narrow the gap between low-cost and premium cigarettes to create a more balanced market, according to data they sent out before the end of 2024.

Entry-level brands see largest increases

Among the entry-level options, Société Marocaine des Tabacs (SMT) raised the prices of Gauloises and Marquise by MAD 1 ($0.10), while Fortuna remained unaffected.

Philip Morris International (PMI) increased L&M and Chesterfield prices by MAD 2 ($0.20) each. Japan Tobacco International (JTI) followed, raising the cost of Monte Carlo by MAD 2 ($0.20) and LD by MAD 1 ($0.10).

Premium brands, such as Marlboro and Winston, steered clear of these price hikes. However, Camel saw a small increase of MAD 0.5 ($0.05) per pack.

Reforming how tobacco’s taxed

The price increases reflect Morocco’s gradual implementation of the tax reform outlined in the 2022 Finance Law, which extends through 2026. Over time, disparities in tax levels across cigarette categories have widened, prompting the government to take action.

In 2024, Morocco’s government projected that taxes on alcohol and cigarettes would generate over MAD 16.4 billion ($1.58 billion) in revenue.

The 2025 finance bill introduces measures to boost tax revenues while also increasing public spending and investment. The goal is to reduce the budget deficit to 3.5% of GDP, a 0.5 percentage point decrease from the previous year.

To achieve this, the government plans to raise domestic consumption taxes on products like hard alcohol, beer, and manufactured tobacco, projected to bring in MAD 657.8 billion ($63.47 billion) — a 14.49% increase.

Expected tax revenues include MAD 1.19 billion ($114.91 million) from hard alcohol, MAD 1.55 billion ($149.76 million) from beer, and MAD 13.7 billion ($1.32 billion) from cigarettes.

By 2026, the TIC´s specific quota will increase from MAD 100 ($9.70) to MAD 550 ($53.40). The minimum tax per 1,000 cigarettes will also surge from MAD 710.2 ($69) to MAD 953 ($92.50).

For consumers, these changes translate into higher prices, especially for entry-level brands. While some may welcome the move toward more consistent pricing, others may find the increases less favorable.