The decision to raise tariffs on imported commodities will up the customs toll by $128 million in second half of 2015/16 (File Photo: DP-Sokhna port)
Egyptian President Abdel-Fattah El-Sisi has issued a decree raising customs tariffs imposed on a large number of imports, state news agency MENA reported Sunday.
According to the presidential decree, No 25 of 2016, the levies on hundreds of imported goods, such as household appliances, cosmetics, garments, footwear, nuts and pet food, will range between 20 and 40 percent.
Previously, tariffs ranged between 10 and 30 percent, Ahmed Shiha, head of the importers division at the Cairo Chamber of Commerce, told Ahram Online in a telephone interview Sunday.
“The decision to raise tariffs on 500-600 imported commodities will up the customs toll by LE1 billion ($128 million) during the second half of fiscal year 2015/16,” Reuters quoted Magdi Abdel-Aziz, the head of the Customs Authority, as saying Sunday.
"The decision is aimed at protecting national industry and stopping the draining of foreign currency," he said.
Egypt has been starved for US dollars since 2011 when popular uprisings toppled president Hosni Mubarak and a subsequent security vacuum spooked tourists and investors away from the country. Foreign currency reserves stood at $16.4 billion at the end of 2015.
The dollar shortage drove the Central Bank of Egypt (CBE) to tighten measures on imports last month, excluding medicines, input materials for pharmaceuticals and babies milk, requiring importers to provide 100 percent cash deposits to banks on their letters of credit, up from 50 percent previously.
CBE Governor Tarek Amer told Reuters earlier this month that the government is aiming to reduce imports by $20 billion in 2016, down from $80 billion in 2015.
“The presidential decree will take a toll on around 850,000 importers registered in Egypt and will cause unreasonable price hikes in the local market,” Shiha said.
The government already adds 25 percent sales tax to the customs tariff on the importer, which will make the aggregate toll range from 45 percent to 65 percent of the commodity’s price in dollars, said Shiha, adding that the division will send a memorandum to the president asking him to reverse the decision.
In another move to curb cheap imports, the government has required the exporters of finished goods to Egypt to register themselves with the Ministry of Trade and Industry, or face a ban on their goods entering the country.