Egypt's parliament approves two-month extension to bill allowing expats to import customs-free cars

Gamal Essam El-Din , Monday 27 Feb 2023

Egypt's House of Representatives passed on Monday a law allowing expatriates to import private vehicles with a grace period of six months -- up from four months -- to pay fees and custom duties, as the government endeavours to attract foreign currency.

Egyptian Parliament
File photo: The Egyptian Parliament during a session.


Under the bill, Egyptian expats who have valid residence permits abroad and bank accounts will be allowed to import one private passenger vehicle for personal use provided it was manufactured no longer than three years before import date.

The bill also stipulates that expats have to use foreign currency to purchase a five-year certificate of deposit (CD), equal to the amount of taxes and customs due on the vehicle, with the finance ministry but at no interest.

The amended legislation was drafted by MP Hesham Hilal and 60 other MPs. The law was meant to end on 13 March, but a two-month extension means it will expire on 12 May 2023.

Minister of Parliamentary Affairs Alaaeddin Fouad told MPs that the government has approved Hilal's amendment in order to allow a larger number of expats to take advantage of the law and pay the dues in foreign currency to the finance ministry.

A report prepared by the House's Budget Committee said the current law stipulates a very short period of time – four months – for Egyptian expatriates to take advantage of the tax-free car import initiative.

The report also indicated "that most of Egyptian expats have long-term business contracts, and hence it is better to extend the grace period for two more months – to be six months – to allow a larger number of Egyptian expats to import tax-free cars and pay the value of duties in foreign currency."

Article 4 of the bill was also changed to state that after paying the required foreign currency dues to the finance ministry, expats will be allowed to import tax-free cars within five years – instead of one year.

MPs also approved Article 3 which states that "cars imported in line with this bill should not exceed three years in age at the time of custom release and starting from the date of manufacturing."

MPs also passed an amendment proposed by Ashraf Rashad, leader of the parliamentary majority party of Mostaqbal Watan. The amendment states that expats will receive a 30 per cent exemption from custom duties and 100 per cent exemption from the value-added tax.

Minister of Parliamentary Affairs Alaaeddin Fouad rejected a proposal by some MPs that the age of imported cars does not exceed five – rather than three – years. "An imported car aged more than five years means that it will consume a lot of spare parts and fuel, not to mention that it will cause pollution to the environment," said Fouad.

The bill is expected to be put up for a final approval on Tuesday.

Meanwhile, the House approved a government-drafted bill exempting phone components from a five per cent development fee. The amendment to a 1984 law, approved by the Budget Committee last week, is meant to encourage the local manufacturing of mobile phones and reduce imports.

The bill is also expected to receive a final approval on Tuesday.


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