Egypt's parliament approves six-month extension of law allowing expats to import tax-free vehicles

Gamal Essam El-Din , Monday 20 Feb 2023

Egypt's parliament approved on Monday the extension of the law allowing expats to import tax-free cars for six months. Amendment to the law, drafted by MP Hisham Hilal, originally proposed that Law 161/2022 be extended by two months only – or from two to four months.

Egyptian Parliament
Egyptian Parliament


 Minister of Parliamentary Affairs Alaaeddin Fouad, however, said the cabinet took note of the amendments proposed by Hilal and other MPs, but it decided that expats will have six months (instead of four months as proposed by MPs), to take advantage of the initiative and pay the dues in foreign currency to the finance ministry.

He also indicated that "expats will be given five years (instead of one year) to import their car of choice, while all expats, including those living in Europe, will get another 50 per cent exemption."

"The cabinet said there is no objection to any amendments that could help generate foreign revenue," said Fouad.

Fouad's announcement came a few days after the House's Budget Committee gave a preliminary approval to the amendment proposed by Hilal and 60 other MPs.  

Hilal said the law, which was passed by the House of Representatives and ratified by President Abdel-Fattah El-Sisi last October, stipulated a very short period of time – four months – for Egyptian expatriates to take advantage of the tax-free import initiative. "This short period of time made it difficult for many Egyptian expatriates, particularly those working in Arab Gulf countries, to take advantage of the tax and customs exemptions offered by the law. Most of those expats have long-term business contracts. Hence, it is better to extend the grace period for two more months to allow a larger number of Egyptian expats to import tax-free cars," said Hilal.

The law was drafted in October as part of a government initiative to attract much-needed foreign currency to the country and solve part of Egypt's foreign exchange gap crisis.

Minister of Finance Mohamed Maait told the House of Representatives at that time that the government had hopes the law would attract $2.5 billion into Egypt.

Under the law, 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 the import date.

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

In December, Maait said the government would introduce changes to the law's executive bylaws to make it easier for a larger number of Egyptians to take advantage of the facilities provided.

After approval by the House's Budget Committee and the cabinet, the amendments will find their way to the House to be up for a final discussion and vote when it reconvenes on 27 February.

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