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Egypt Hikes Customs Tariffs On Luxury Goods

by Lorys Charalambous, Tax-News.com, Cyprus

26 March 2013


Determined to increase fiscal revenues to reduce the public deficit, Egypt’s President Mohammed Morsi has recently issued a decree raising customs tariffs on imports of luxury goods.

The decree provides for a 5% rise in the existing customs tariff imposed on luxury items. A 40% tariff is to apply in future to imports of goods including sunglasses, watches, video games, shrimps, fireworks and boats. The decree also introduces two further new customs tariffs: a 20% tariff on goods imported by tourist organizations, with the exception of cars, and a 2% tariff levied on materials used in the production of milk formula.

The decision forms part of Government efforts to appease the International Monetary Fund (IMF). The Government is currently in talks with the IMF to secure a USD4.8bn loan.

At the end of February, The Egyptian Finance Ministry unveiled plans to amend customs tariffs. At the time, the Ministry emphasized that it aims to reduce tariff averages, fully exempting basic staples and strategic commodities. It also said that it intends to extend the customs exemption to include production machinery, equipment and intermediate inputs, and plans to abolish EGP1bn (USD0.15bn) in sales taxes on behalf of Egyptian producers.

This is a good start, then.

TAGS: Finance | tax | sales tax | tariffs | tax rates | Egypt | tax breaks

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