Morocco's Proposed Tax Increase on E-Cigarettes
In a significant move set to take effect from January 1, 2027, Morocco plans to double the domestic consumption tax on electronic cigarettes from MAD 50 to MAD 100 per unit. This proposed increase, detailed in Article 5 of the 2027 Finance Bill, aims not only to raise retail prices but also to impose a broader taxation framework on various vaping products, including refillable devices and their components. The legislation, formally presented to the parliament as Bill No. 60.26, seeks to redefine the legal classification of electronic cigarettes to encompass not only disposable devices but also rechargeable and refillable products, irrespective of their nicotine content.
The updated definition will include devices designed for inhaling vapor through a mouthpiece, in addition to cartridges, tanks, and other equipment sold either empty or prefilled with vaping liquids. This comprehensive approach is intended to integrate previously exempt products into the tax network while minimizing opportunities for tax evasion through the separate sale of components.
Impact on Importers and Consumers
The proposed tax hike is expected to have notable implications for importers and distributors, who will need to adapt their customs declarations and commercial practices to align with the newly expanded legal definitions. The actual impact on retail prices will largely depend on the profit margins maintained by distributors and the extent to which they choose to pass on the additional tax burden to consumers. It is important to note that this measure is still pending parliamentary approval, which will determine its final implementation.
In conjunction with the e-cigarette tax increase, the Moroccan government has also proposed a comprehensive five-year tax reform aimed at conventional manufactured tobacco. This reform will introduce gradual increases in both the specific and proportional components of the domestic consumption tax from 2027 through 2031. Specifically, the specific tax is slated to rise from MAD 645 per 1,000 cigarettes in 2027 to MAD 1,053 by 2031, marking an approximate increase of 63.3%. Meanwhile, the proportional component is expected to increase from 57.5% to 61.5%, and the minimum tax collected will rise from MAD 1,025 to MAD 1,346 per 1,000 cigarettes, reflecting a 31.3% increase.
With these changes, the Moroccan government anticipates that tobacco consumption tax revenues will soar to MAD 19.32 billion in 2027, a notable increase from MAD 17.72 billion in 2026, thereby highlighting its commitment to regulating tobacco use while simultaneously enhancing public health initiatives.
As reported by en.hespress.com.
