The Egyptian government has approved rules to implement the provisions of a law that gives Egyptians living abroad the opportunity to import cars from abroad, exempt from taxes and customs duties, in exchange for a 5-year non-refundable bank deposit.
The head of the Parliamentary Committee on Plan and Budget, Dr. Fakhri al-Fiki, expects the law will boost Egypt’s foreign exchange resources by $5 billion.
The Egyptian government is seeking, through law, to provide some benefits to Egyptians living abroad, to increase their remittances, which represent one of the most important sources of foreign exchange for the country, and the desire to get the maximum benefit from these remittances, both for the state and for Egyptians living abroad, according to the bill’s memorandum.
The head of the parliamentary committee on planning and budget said the number of Egyptian workers abroad is approaching 12 million, of which, according to official estimates, half of this number is in the Gulf states. Egyptians living abroad.
According to the Central Bank of Egypt, remittances from Egyptians abroad amounted to $31.9 billion in fiscal year 2021/2022, compared to $31.4 billion in fiscal year 2020/2021, i.e. the growth rate was 1.6%.
Fakhri Al-Fiqi said that the purpose of the amendments to the law is to achieve the interests of the three parties. First: Egyptians abroad, by simplifying car importation procedures, in addition to other simplifications that have already been granted for the provision of land and housing for this category under the Homeland Initiative. Second: the state, benefiting from an increase in foreign exchange. and an increase in workers’ remittances abroad. Third: the car market to solve the car shortage crisis, leading to a reduction in the phenomenon of price gouging, which is the imposition of an additional price in exchange for the immediate delivery of the car.
In 2012, the Egyptian government launched the Beit al-Watan project for Egyptians abroad to provide housing and land in exchange for payment in foreign currency. Eight phases of this project have been launched, providing over 22,000 residential lots and thousands of housing units.
Al-Fiqi expected that about half a million Egyptians living abroad would benefit from facilitating car imports, with an expected $5 billion collateral value, helping to boost Egypt’s cash reserves, which are worth more than the funding it receives from the International Monetary Fund. , in addition to this, an increase in this value is expected. The government receives it within 4 months after the implementation of the executive orders of the law issued on Monday, which increases the volume of foreign exchange supply.
Egypt has reached an agreement to receive $9 billion in loans, including $3 billion from the International Monetary Fund, $1 billion from the Sustainable Development Fund and $5 billion from development partner countries.
Al-Feki indicated in exclusive statements to CNN in Arabic that residents of European countries have an advantage due to their association with Egypt under a free trade agreement (exempted from customs duties), which reduces the cost of a deposit to be deposited in banks, so as residents of European countries will pay only for taxes and fees. Without paying customs, to the account of the Ministry of Finance for a period of 5 years without a refund.
Since the beginning of 2019, the Egyptian government has exempted cars of European origin from customs duties in order to activate the partnership agreement between Egypt and the European Union.
Alaa El-Saba, a member of the Automobile Department of the General Federation of Chambers of Commerce, believes that a limited number of Egyptians living abroad would benefit from a law allowing the import of cars exempted from customs duties for two reasons. Firstly, this is a decrease in the volume of deliveries of cars abroad due to the continued crisis of electronic chips and the Russian-Ukrainian war, and secondly, a very short period for transferring a deposit for an imported car against taxes and customs. in addition, the government restricted the import of the car only from countries in which the Egyptian resides abroad, and not from other countries duty-free.
The regulations governing the importation of cars by Egyptians abroad state that the amount of money due must be transferred immediately after the registration of the car on the platform intended for this, to the government’s bank account within 4 months from the date of entry into force of the provisions of the decision. , then filling in the data on the transfer and uploading the document with its indication in electronic form to the platform.
Regarding the implications of the application of the car price law in Egypt, Al-Saba said in an exclusive statement to CNN in Arabic that the cost to agents and distributors is very high, which has affected car prices and caused the phenomenon of “overpriced” to disappear. excluding the import of a large number of cars. Cars are not included in the bill.
He added that despite the Central Bank’s decision to ease imports and implement a flexible exchange rate system, the supply of cars on the market is still low, and attributed the return of imports to an increase in the supply of foreign exchange due to the government’s success in attracting new foreign investment.
According to the Egyptian Automobile Market Information Council (AMIC), vehicle sales decreased to 148.5 thousand vehicles between January and August 2022 compared to 186.3 thousand vehicles in the same period last year, a decrease of 20%. .