Back to the complete issue
Wednesday, 14 February 2018

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.

Enterprise is a daily publication of Enterprise Ventures LLC, an Egyptian limited liability company (commercial register 83594), and a subsidiary of Inktank Communications. Summaries are intended for guidance only and are provided on an as-is basis; kindly refer to the source article in its original language prior to undertaking any action. Neither Enterprise Ventures nor its staff assume any responsibility or liability for the accuracy of the information contained in this publication, whether in the form of summaries or analysis. © 2022 Enterprise Ventures LLC.

Enterprise is available without charge thanks to the generous support of EFG Hermes (tax ID: 200-178-385), the leading financial services corporation in frontier emerging markets; SODIC (tax ID: 212-168-002), a leading Egyptian real estate developer; SomaBay (tax ID: 204-903-300), our Red Sea holiday partner; Infinity (tax ID: 474-939-359), the ultimate way to power cities, industries, and homes directly from nature right here in Egypt; CIRA (tax ID: 200-069-608), the leading providers of K-12 and higher level education in Egypt; Orascom Construction (tax ID: 229-988-806), the leading construction and engineering company building infrastructure in Egypt and abroad; Palm Hills Developments (tax ID: 432-737-014), a leading developer of commercial and residential properties; Etisalat Misr (tax ID: 235-071-579), the leading telecoms provider in Egypt; and Industrial Development Group (IDG) (tax ID:266-965-253), the leading builder of industrial parks in Egypt.