The cabinet has approved a request by the Ministry of Emigration and Egyptians Affairs Abroad to extend for one month — starting 29 April — the second phase of the state’s initiative allowing expatriates to import vehicles in Egypt. The second stage is the state receiving the value of the vehicle in dollars.

Some who applied and were issued payment orders through a designated e-platform encountered problems completing their cash transfers from overseas. Other cases necessitated alternative payment mechanisms.

The plan launched over a year ago permits Egyptians residing abroad, or any family member over the age of 16 with residency abroad, to bring a car into Egypt with exceptional exemptions on taxes, customs, and fees.

According to official numbers, 590,000 expats have registered on the new platform, of whom 265,000 have already paid the import fees. Payment orders issued to beneficiaries of the initiative stand at $2 billion, of which $800 million have been paid. Around 30,000 cars out of 602,277 have been released so far.

The Ministry of Emigration reported that most payment orders were released to people yet to decide on the make of car they want to import, in which case they deposit $823 to reserve a spot with the intention of buying a smaller-sized car. They usually opt for a more expensive car and pay a higher deposit, the ministry said, indicating the project is yet to collect larger amounts of dollars.

Osama Abul-Magd, vice president of the Automotive Division of the Chamber of Commerce, said the idea has proven successful despite global challenges to car production. Over the past year, 30,000 cars entered Egypt, accounting for one-third of car transactions in the market, he said.

The state could have collected from $3 billion to $5 billion if not for Egypt’s dollar shortage crisis and the difference in the price of the dollar in the official and black markets, Abul-Magd noted.

Upon the liberalisation of the price of the dollar, hundreds of thousands of people were further encouraged to join the initiative, Abul-Magd pointed out. Before the floatation, the dollar was sold for LE30 in the official market and for over LE60 in the parallel market, discouraging people from making any transfers through official channels.

The plan’s first phase was slated for three months and was extended for a similar period. Similarly, the second phase was set for three months and increased another three months. Beneficiaries can import cars without incurring customs duties or taxes in exchange for depositing a dollar sum for five years without interest. The sum is reimbursed at the currency rate prevalent after five years.

The government’s drive serves two purposes: facilitate expats’ acquisition of imported cars with simple regulations, and increase their remittances to raise the state’s foreign exchange reserves, while expanding the availability of cars in the local market.

Initially, it did not realise its maximum potential due to challenges associated with fund transfers and the prevailing customs tax rates in countries that did not sign free trade agreements with Egypt. Consequently, the government took measures to ensure that the enterprise would yield greater benefits for both the state and Egyptians abroad.

In response to complaints by expatriates, the Emigration Ministry abolished previous ratifications and credit requirements and mandated depositing 30 per cent of the customs tax value in dollars, refundable in pounds after five years, according to the prevailing exchange rate at the time of reimbursement.

Other amendments include the flexibility to change the make of the car intended for import while paying the difference in deposit value depending on the type of car.

Moreover, the period for importing cars has been extended from one to five years. People can also import used cars, provided that the bill of lading be issued a maximum three years earlier.

Despite the government’s efforts to streamline procedures, numerous complaints persisted, particularly concerning bank transfers. In response, the government agreed to extend the second phase one month to allow the use of alternative mechanisms to accommodate the needs of Egyptians living in conflict zones or facing hurdles in conducting bank transfers.

However, the grace period only applies to expats who had registered on the initiative’s e-platform, giving them the opportunity to finalise the transfer of the dollar deposit. It is also essential for beneficiaries to have been issued a registration number containing their data, and to have provided the number and data of their bank account in Egypt to which the deposit value will be returned after the five-year period.

The government has attempted to address challenges facing bank transfers by offering various solutions tailored to each case in coordination with relevant authorities. Options include transferring funds through exchange companies, using a relative’s account abroad, or bringing the amount in dollars and providing proof upon entry through air or sea ports, after which it can be deposited to an account in the National Bank of Egypt.

Egyptians residing in countries affected by conflict zones must register a complaint via a hotline or email. Alternatively, they can send an email to the Ministry of Emigration stating their name, registration number on the application, complaint number, country of residence, and the problems encountered in the cash transfer.

The ministry said it will address each case individually and tailor a solution for each applicant based on country of residence and the problems encountered.

Minister of Finance Mohamed Maait said efforts are underway to expedite the procedures given that approvals are valid for five years, during which people can choose and replace their desired car at any time. The deposit value, which represents the reduced customs tax imposed on cars imported, remains valid throughout the import approval period, Maait added.

He noted that the first owner has the right to import a car without being restricted by its year of manufacture, while second-hand importers must ensure that the car is not more than three years old at the time of customs release.

Maait explained that beneficiaries can buy cars from free zones in Egypt with the same procedures mandated for importing cars. The e-platform allows people to select a free zone in Egypt as the import destination provided that the cash is transferred to the seller’s account abroad in foreign currency.

A committee operates at customs ports, including on weekends and public holidays, to accelerate customs release procedures.

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* A version of this article appears in print in the 9 May, 2024 edition of Al-Ahram Weekly