The latest hikes in custom tariffs on imports is expected to generate around LE1 billion ($150 million) in additional revenues annually, estimates the head of the Egyptian customs authority.
Egyptian President Mohamed Morsi issued a decree on Sunday raising customs tariffs on 100 "luxury goods," including videogames, baby formula milk and chewing gym. Specifically, the decree raises tariffs from 5 percent to 40 percent on items such as sunglasses, watches, nuts, boats and videogames. Also, a 20 percent tariff was placed on all equipment imported by tourist establishments, excluding automobiles.
"The new tariffs did not intend to affect essential goods, which affect the lower income segments," says the head of Egypt's customs authority, Mohamed El-Salhawy to the official state news agency, MENA on Monday.
They have been studying the new levies since September 2012, reveals El-Salhawy, and were undertaken after consultation with the Egyptian chambers of commerce and industries federation.
Egypt's government struggles to reduce its balance of payment deficit and raise state revenues to bridge the government funding gap.
Revenues from customs reached a total LE14.7 billion in 2011/12, some 7 percent of total tax revenues in Egypt.