The next time you go out for sushi, you could end up paying a fatter bill. The chopsticks you eat with will cost more to import and so will some of the fish thanks to amendments introduced last week to import duties on some 5,800 items. Duties on around 20 per cent of the products are set to increase by an average of 20 to 60 per cent, a Ministry of Finance statement said. Imports by hotels and tourism businesses have seen a 20 per cent increase in duties. Items such as electronics will see an increase of duties by 40 per cent. Goods such as imported juices will see import duties increase from 20 to 60 per cent. However, 60 per cent of the list includes raw materials and capital goods whose customs tariffs remain untouched, and some pharmaceutical goods will see tariff reductions. Goods such as toothpaste, soap and sportswear will see import duties decrease from 60 to 40 per cent. The move to amend the duties is intended to encourage local industry, boost investment and reduce the imports of non-essential goods and thus ease the burden on the country's budget, the government said. According to Magdeddin Al-Manzlawi, former head of the Customs Committee at the Federation of Egyptian Industries, the decree corrects some distortions in the previous import duties. “Tariffs on some products were higher than customs imposed on their equivalent fully manufactured products,” he pointed out. The decree was designed to minimise the non-essential imports and reduce the demand on foreign currency, he said. That is why tariffs were increased on some fruits and fish products, Al-Manzlawi explained. He does not expect the duty modifications to affect prices since customs were not increased by more than 20 per cent of the total price of a product. However, Ahmed Shiha, head of the Importers Division at the Federation of Egyptian Chambers of Commerce, believes that the over-protection of local industry from imported goods is the real reason for the increases in customs duties. Shiha explained that restrictions on imports at the time of the floatation of the Egyptian pound in 2016 meant to curb foreign-currency spending cut the imports bill from $30 billion in 2015-2016 to $18 billion in 2016-2017. “That was a good opportunity for local industry to grow and increase its exports, but nothing actually happened,” he said. Markets should be left to the forces of supply and demand, Shiha said. If a local product is competitive in terms of quality and price, it will win markets because a consumer needs good quality at low prices and does not care if the goods are locally produced or imported, he added. Shiha questioned the need to increase tariffs on items such as tea and coffee when there is no local industry to protect. He worried that an increase in customs tariffs would just mean monopolies for a few local manufacturers. According to Shiha, the higher duties coupled with the 14 per cent value-added tax (VAT), shipping costs and other related fees will inflate prices dramatically. “It will be the consumer who bears these increases in the end,” he noted. Kamel Negm, head of the Egyptian Customs Authority, announced that the decision to put fish products and some fruit on the list was in line with international customs regulations controlling food security and met the standards of the UN Food and Agriculture Organisation. Items such as chemicals, pharmaceuticals and medical materials are also new to the list of items attracting tariffs. In a move to encourage clean energy, the tariffs exempt electrically powered cars to encourage more consumers to use them. Tariffs were also reduced on duel-engine vehicles using electricity and petrol from 40 to 30 per cent. Duties on cars running on natural gas up to 1,600 cc are down from 40 to 26 per cent. Although there are exemptions and the reduction of tariffs on some products, consumers are unsatisfied. Shaker Masoud, an employee at the Ministry of Education, said the new tariffs would lead to an overall increase in prices. “The government should not depend on imposing tariffs and taxes to solve the budget deficit. It needs to find other solutions to the problem,” Masoud said. The latest amendments are part of the government's move to abide by the International Harmonised System Code (HSC). Developed by the World Customs Organisation (WCO), this is used by more than 200 countries as a basis for their customs tariffs. According to the WCO, over 98 per cent of the merchandise in international trade is classified in terms of the HSC. The latter “contributes to the harmonisation of customs and trade procedures, and non-documentary trade-data interchange in connection with such procedures, thus reducing the costs related to international trade,” it says. Egypt is obliged to update its system to be in line with recent updates to the HSC dating from 2018. Due to the excessive use of wood worldwide, the new HSC includes varieties of wood on the international customs list, for example. To implement these changes, Egypt has added new items made of wood such as kitchen tables and chopsticks to its imports list, imposing 40 per cent customs duties. Negm announced that overall the decision had added some 275 items to the imported goods list.
