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Sunday, 18 September 2016

Ismail cabinet approves automotive directive, will introduce it to the House

The Ismail cabinet has approved the updated automotive directive and will pass it on to the House of Representatives when parliament reconvenes from recess in October, said the head of the Egyptian Automotive Feeder Industry Association Ali Tawfik. The bill would provide customs breaks for imported components, access to credit, and free land for domestic and international companies looking to build manufacturing facilities. Parallel incentives would encourage the industry to export production, and all incentives are conditional on participating companies boosting domestic content in their vehicles to 80% within five years, Tawfik tells Al Borsa. The strategy aims to see Egypt develop the capacity to manufacture 1 mn vehicles a year and create a total of 6 mn direct and indirect jobs. Phase one will target an annual capacity of 100k vehicles. The strategy will also benefit from tax rebates on exports under the value-added tax legislation, said Customs Authority Magy Abdel Aziz. Automotive assemblers hope the strategy will protect jobs and businesses threatened by what they claim is unfair competition from Turkish, Moroccan and European Union imports.

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