Amendments to the Customs Act will expand exemptions for production inputs
LEGISLATION WATCH- Amendments to the Customs Act will expand exemptions for production inputs. The Finance Ministry announced changes to the Customs Act designed to expand exemptions and tighten loopholes for tax dodgers. The amendments will expand temporary exemptions for productions inputs throughout the value chain and, for the first time, include packaging equipment on the list items eligible for temporary exemptions. Goods that have been imported to be refined and then re-exported will also receive temporary exemptions, according to a ministry statement.
Tightening loopholes: The amendments, which received cabinet approval last week, reduce the duration of temporary licenses to one year with the possibility of a one-year renewal period, down from four years right now. The move is meant to tighten supervision on temporary exemption grants, the statement reads. Importers who want to use for other purposes goods that were originally imported as production inputs must pay the full custom duties and an additional penalty tax. That tax has been reduced to 1.5% from 2%.
Reducing congestion at customs: The amendments will also reduce the time goods are allowed to remain in storage at Customs Authority before being claimed to six months.
In other customs-related news, Trade and Industry Minister Tarek Kabil extended the grace period for importers to comply with amendments to the Importers Registry Act by another six months, the ministry said in a statement on Tuesday. The amendments include increasing the minimum capital for individuals to be registered to EGP 500k from EGP 10k, for limited liability companies to EGP 2 mn from EGP 15k, and for joint-stock companies to EGP 5 mn. The law also imposes stricter penalties for violation of import regulations.