Egypt adjusts customs tariffs on listed goods, adds new ones

Egyptian President Abdel Fattah al-Sisi issued a decree to amend some customs categories and add new ones, raising tariffs on a group of imports for the second time since January 2016, while reducing fees on some other commodities.

The official state gazette published the new decree on Wednesday, that was written on 9 September, and which will come into effect on 13 September.

“The decision on Wednesday included 5791 international and domestic items, of which 3495 items of raw materials, capital goods and strategic goods have not been changed, accounting for about 60 percent of the total items,” Egyptian customs chief Kamal Negm told Reuters.

“The resolution also didn’t change 994 items of intermediate goods used in industrial processes, which account for 17 percent of the total items. The rest of the items, which account for about 23 percent of the total, have a tariff range from 20 to 60 percent”, Negm said.

The decision included imposing a 20 percent tariff fee on machinery and equipment imported by touristic institutions, except for passenger cars, and applying a fee of 10 percent of the value of repaired goods exported abroad when they were temporarily imported.

The amendments also included the imposition of a two percent tariff fee on the imports of infant formula factories that are similar to mother’s milk and infant formula.

The decision also included a five percent fee on imports from Arab Organization for Industrialization (AAS) companies on spare parts and accessories needed for repairing railway trains’ engines.

Egypt adjusted its custom tariffs on a wide range of imports on the back of a currency crisis that it faced in 2013, and they were amended in January 2016.

As a way to encourage local industry, Egypt has decided to reduce tariffs on companies working in the assembly industry, particularly the ones working on complex goods.

“The amendments come in the context of encouraging the local industry and urging citizens to reduce the consumption of non-essential goods,” said the head of research at investment bank Pharos, Radwa Suweifi, to Reuters.

Egypt has added new items to the list of tariff fees such as fish products, fruits, agricultural pesticides products and insecticide disinfectants, the official state gazette said on Wednesday.

Charges levied on some imported household products such as refrigerators and air conditioners are 60 percent and tariffs on fruits ranges from 10 to 60 percent.

Negm noted that “275 new international items were added, including food commodities such as fish products and fruits in order to strengthen food security control, which is in line with the international standards of Food and Agriculture Organisation of the United Nations.”

“New varieties of wood and manufactures such as tableware and chopsticks have been added with 40 percent tariff fees in addition to the introduction of an item for LED lamps.”

Egypt exempted electric-powered cars from custom duties to be only required to pay the value added tax, and reduced tariffs on dual-engine vehicles of electricity and gasoline.

The tariffs imposed on vehicles working on natural gas, up to 1,600cc, have been reduced to 26 percent, down from 40 percent previously.

Egypt imposed restrictions in December 2015 to reduce the chaos of excess imports in light of its hard currency scarcity at that time, with the aim of eliminating the gaps that some importers used to avoid paying the fees in order to preserve the resources of the public treasury from customs.

Local producers in Egypt usually complain about their inability to compete with imported goods’ prices because of customs evasion and manipulation of import bills.

The official newspaper added that a higher tariff council will be set up under the supervision of the finance minister to “discuss and propose appropriate amendments to the custom tariffs and develop their systems in accordance with economic changes.”

Source: Reuters