Morocco will implement another round of cigarette price hikes in 2025, with entry-level brands experiencing the most significant increases. The adjustments, which raise the cost of some packs by up to MAD 2 ($0.20) while minimally impacting premium brands, align with the government's goal of creating a more balanced market by narrowing the gap between low-cost and premium cigarettes.
Domestic Consumption Tax Reforms Drive Price Changes
The price changes are part of the ongoing Domestic Consumption Tax (TIC) reforms on tobacco products, which were outlined in the 2022 Finance Law and will continue through 2026. The government aims to address the growing disparities in tax levels across cigarette categories, which have widened over time.
Entry-Level Brands Bear the Brunt
Société Marocaine des Tabacs (SMT) has raised the prices of its entry-level brands, Gauloises and Marquise, by MAD 1 ($0.10), while leaving Fortuna unaffected. Similarly, Philip Morris International (PMI) has increased the prices of L&M and Chesterfield by MAD 2 ($0.20) each, and Japan Tobacco International (JTI) has followed suit, raising the cost of Monte Carlo by MAD 2 ($0.20) and LD by MAD 1 ($0.10).
In contrast, premium brands such as Marlboro and Winston have avoided price hikes altogether, with only Camel seeing a small increase of MAD 0.5 ($0.05) per pack.
Tax Reforms Aim to Boost Revenue and Reduce Deficit
The 2025 finance bill introduces measures designed to increase tax revenues while simultaneously increasing public spending and investment. The government's 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, which are projected to generate MAD 657.8 billion ($63.47 billion) in revenue, representing 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.
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Long-Term Impact on Consumers
By 2026, the TIC's specific quota will increase from MAD 100 ($9.70) to MAD 550 ($53.40), and the minimum tax per 1,000 cigarettes will surge from MAD 710.2 ($69) to MAD 953 ($92.50). These changes will translate into higher prices for consumers, particularly those who prefer entry-level brands. While some may welcome the move toward more consistent pricing, others may find the increases less favorable.
As the vaping industry continues to grow and offer alternatives to traditional cigarettes, it is essential for manufacturers, retailers, and consumers to stay informed about the evolving tax landscape and its impact on product prices. While these changes may encourage some smokers to explore alternative nicotine delivery systems, such as e-cigarettes, it remains to be seen how the market will adapt to these new regulations.
