Unifying foreign currency rate is a positive step: Tawfik

Yara El-ganiny
3 Min Read

Automotive expert Ali Tawfik expressed his satisfaction with the Ministry of Finance’s decision to liberalise the exchange rate of the customs dollar after the state had fixed it at EGP 16 per US dollar in 2017.

He pointed out that it is better to unify the US dollar price because it allows more freedom for obtaining dollars, where its value varies from one exchange office to another and from one bank to another.

Ali Tawfik

“As of 1 September, the customs duties on imports of all kinds will be estimated according to the foreign currencies exchange rates announced by the central bank”, the finance ministry said on Sunday.

Tawfik pointed out that the unification of the dollar price will facilitate the calculation of the prices of imported goods, in addition to not disrupting trade operations that were waiting for the price of the customs dollar to settle, adding that the decision will also benefit local production. He noted that the decision’s impact goes beyond imports, including production input and goods.

Tawfik noted that the difference in value is only 4%, which means that customs on imports will rise by 4% only, while many imports from Europe, Turkey, and some Arab states, including COMESA countries, are subject to tax exemptions, so the impact will be limited to imports from Eastern countries and from the United States.

He added that this decision has nothing to do with the manipulation of the prices of goods and products, but what actually prevents the manipulation and fraud in prices is linking all customs outlets electronically to limit the manipulation and fraud.

Osama Aboul Magd

Meanwhile, Osama Aboul Magd, president of the Egyptian Automotive Dealers Association, said the liberalisation of customs exchange rate will have little impact on the prices of cars in the local market during the current period.

He noted that car prices in the local market was not affected because fixing customs dollar was applied to car prices, being considered as luxury goods.

Furthermore, Aboul Magd stressed that the customs dollar is determined monthly based on prices of food commodities, raw materials, and subsidised goods, while the customs dollars for cars were based on the dollar exchange in the local market.

The Central Agency for Public Mobilization and Statistics revealed that Egypt’s imports of cars and spare parts during the first four months of 2019 amounted to about $1.774bn, while it scored $397m in April. 

The value of passenger car imports during the first four months of 2019 reached about $772.27m, a growth of 10.2% compared to the same period of 2018.

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