Presidential Decree Sets out New Cu
Presidential Decree Sets out New Custom Tariffs
On 11 September 2018, new custom duties were issued by virtue of Presidential Decree No. 419 0f 2018 (the “Decree”).[1] The Decree has increased import tariffs for over 300 goods in a variety of categories. Government officials announced that the Decree is aimed at encouraging national industry and updates the classification of goods to comply with international treaties that Egypt is a member to.[2] In effect, the most recent hike in custom duties is hoped to curb importation and reduce high demand on foreign currency. The new rates are applicable starting Wednesday, 12 September 2018.
Background
According to the Customs Law No. 66 of 1963, custom tariffs are issued through a presidential decree that has the force of law, and are presented to the House of Representatives immediately following implementation. The current Decree repeals the prior presidential decree setting out custom tariffs – Decree No. 184 of 2013 – as amended in 2016.[3] An explanatory memorandum that was published with the Decree states that the amendments to the coding of goods for custom purposes has taken into consideration the Harmonized Commodity Description and Coding System (“HS”). HS is an international system for the classification of products whereby participating countries classify traded goods on a common basis for custom purposes. The system was first introduced in 1988 and it is reviewed and updated every few years, the most recent of which being in 2017.Recent Custom Tariffs
The Decree is a 471-page document with 10 articles in its beginning, an explanatory memorandum, and the HS schedule with a column determining the custom tariffs for each classified item. The articles apply a 10% custom duty on any good that is temporarily sent abroad for maintenance or repair and then re-entered into Egypt. The percentage is calculated based on the price of maintenance plus shipping and insurance costs. A 20% custom duty is imposed on imports by hotel and tourism facilities, that is based on value or importation tax (whichever is less). Other than, a variety of goods saw custom tariff increases between 40 to 60 percent. This includes garments, electronics, detergents, and some food items. In terms of custom tariff reductions and exemptions, these include medication for chronic and terminal illnesses. Vehicles that run on natural gas or electric power also enjoy custom tariff reductions. Furthermore, the Decree contains favourable treatment for assembled goods based on the percentage of local component used in production. Finally, the Decree establishes a Supreme Council for Custom Tariffs headed by the Minister of Finance. The Council is to study and propose amendments to custom tariffs as appropriate and suggest the development of special systems in order to keep up with economic changes. In addition, the Decree states that the Minister of Finance is to issue explanatory and guiding rules for the interpretation of custom tariff schedules. [1] Presidential Decree No. 419/2018 on Custom Tariffs, Official gazette, Issue No. 36 (bis) (a), 11 September 2018. [2] MoF Press Release, “President Sisi Issues New Custom Tariffs which are Applicable starting from Today”, available through this link (in Arabic). [3] Presidential Decree No. 538/2016 amending Decree No.184/2013 on Custom Tariffs, Official Gazette, Issue No. 47 (bis) (b), 30 November 2016.
في 11 سبتمبر 2018، صدر قرار رئيس الجمهورية رقم 419 لسنة 2018 بالتعريفة الجمركية الجديدة ("القرار").[1] ويزيد القرار التعريفة الجمركية على الواردات لما يزيد على 300 سلعة من الفئات المختلفة. وقد صرح مسئولون حكوميون أن القرار يهدف إلى تشجيع الصناعة الوطنية وتعديل تصنيف السلع ليتماشى مع الاتفاقات الدولية.[2] ويعد الأثر المأمول للزيادات الأخيرة هو الحد من الاستيراد وخفض الطلب على العملة الأجنبية. وتسري التعريفة الجديدة من يوم الأربعاء الموافق 12 سبتمبر 2018.