Back to the complete issue
Monday, 28 May 2018

Preferential “white list,” new tariffs on tourism, new penalties and more in Customs Act

EXCLUSIVE- Preferential “white list,” clampdown on tour agency car rentals, new penalties and more in Customs Act: The latest draft of the Customs Act will include a host of measures that facilitate the flow of goods through Egypt’s ports while also introducing new tariffs for the tourism sector and penalties for violators, sources tell Enterprise. We’ve also received confirmation that a number of recently announced changes to the act are in place, including slashing customs duties on capital goods to 2% from a current 5% and expanding temporary exemptions for production inputs and packaging equipment. Highlights of law, which is currently with the Finance Ministry for review, include:

  • Sometimes, common sense wins: The Customs Authority will establish a “white list” of importers who will benefit from expedited clearance of goods. Companies on the list will be able to clear their goods without initially undergoing full procedures. An inspection of their warehouses and their documentation will be conducted later. Importers “in good standing” who have been abiding by the rules will be eligible for entry on the list.
  • No more gaming the system: The amendments propose a new tariff structure for vehicles imported by tour operators, hotels and resorts. Tariffs on cars and vans imported by industry players will double to 10% for vehicles with a price tag of under EGP 500k. Cars over that level will pay 10% for EGP 500k of the price tag, while the remainder of the value will be subject to a levy of 40-135% based on engine size. Tour buses will continue to be taxed at their current level of 5%.
  • A limit will also be imposed on the number of vehicles a tourism operator can import. The Tourism Ministry will determine the allocation for company based on its size.
  • In other words: Say goodbye to the racket of importing vehicles nearly customs-free and then renting them out as personal automobiles with discrete stickers applied.
  • The amendments will see the introduction of installment payments on import duties.
  • Penalties will be amended. Smuggling of banned goods could see prison sentences of up to five years. Customs evaders can choose between time in prison or paying fines of double the import bill.
  • Signing off on temporary exemptions will be the sole purview of the Customs Authority. Prior to the amendments, various ministries could issue temporary exemptions.
  • We’ve heard this before: The Customs Authority will establish a single platform for importers to obtain and submit all their documents. The authority will also establish a importer services department.

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 HSBC Egypt (tax ID: 204-901-715), the leading corporate and retail lender in Egypt; 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; Moharram & Partners (tax ID: 616-112-459), the leading public policy and government affairs partner; Palm Hills Developments (tax ID: 432-737-014), a leading developer of commercial and residential properties; Mashreq (tax ID: 204-898-862), the MENA region’s leading homegrown personal and digital bank; Industrial Development Group (IDG) (tax ID:266-965-253), the leading builder of industrial parks in Egypt; Hassan Allam Properties (tax ID:  553-096-567), one of Egypt’s most prominent and leading builders; and Saleh, Barsoum & Abdel Aziz (tax ID: 220-002-827), the leading audit, tax and accounting firm in Egypt.