Customs Council yet to take decision on tariff cuts, says official

Theodore May
4 Min Read

CAIRO: Inside the Customs Council, intense negotiations are ongoing with the aim of reducing tariffs on imported goods in an effort to spur the Egyptian industry.

Though Al-Masry Al-Youm reported last week that changes in the customs laws were imminent, officials insist that the majority of changes may still be several weeks away.

The newspaper reported a specific plan for the customs structure, though officials denied that they had reached that level of specificity in their plan.

Under the reported plan, most items with a 2 to 5 percent import tariff would eventually be freed of any duties. Most of the items under review in this category include industrial inputs – items critical to driving Egyptian industry.

Reports also indicated that the Customs Council would reconsider the tariff on any goods with a 10 percent import tax, but that items with a 30 percent tax will not be touched.

Sitting down with Customs advisor to the Minister of Finance, Galal Aboul Fotouh, Daily News Egypt learnt that plans like the ones reported by Al-Masry Al-Youm were in the works but that the process was far from finished and faced many opportunities to be changed.

The process for determining new customs laws, as Aboul Fotouh described it, is a lengthy one. First, a committee in the Customs Council reviews each of hundreds of tariffs applied to different goods.

The Council “studies the needs of the markets and of the business community, said Aboul Fatouh. “They study the goods themselves, whether Egypt’s production is enough for Egypt.

The customs manual is over 400 pages long, comprised mostly of lists of goods and their corresponding tariffs.

“Today we are studying what will affect the economic crisis, said Aboul Fotouh. “If any goods need inputs, we may reduce the tariff on those inputs.

When the Customs Council finishes its item-by-item review, the recommendations head to the Minister of Finance, who conducts his own review before meeting with the Egyptian President. Once the President signs off, the tariff bill is passed to the People’s Assembly for ratification.

Aboul Fotouh informed Daily News Egypt that the Customs Council is currently reviewing each tariff and will, in the next several weeks, pass on its findings to the minister.

Sources indicate that the process is moving quickly and that the first stage will be completed by the end of the week and President Hosni Mubarak will be presented with a bill to sign in January.

“What the government needs during this period [of economic turmoil], the government needs to reduce customs tariffs on inputs, said Aboul Fotouh.

With the customs tariffs high and the economy suffering, certain industrial inputs -meaning the pieces that Egypt must import to create goods in integral sectors like textile, printing, and electrical – have become scarce, slowing Egyptian industry and boosting the price for consumers.

Exports are also expected to suffer.

“Export is reduced during the economic crisis, said Aboul Fotouh, “and we are trying to help Egyptian exports.

The government hopes that by reducing these tariffs, inputs may flow more freely into the country and spur growth.

“We import from the foreign industry, Aboul Fotouh said. “If it would impact our industry [negatively], I won’t touch it.

The Industrial Union has petitioned the Customs Council to shift the tariffs on all goods currently at 2 to 5 percent down to zero.

“We will consider this and take some and leave others, said Aboul Fotouh.

The Council last amended its customs levels in April, 2008, so this will be the first time that the Customs Council will amend the tariffs since the economic crisis began.

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