Gulf market briefing 31/05/2023    Türkiye economy grows by 4% in Q1 of 2023    Toyota customers face data leak risk due to server error    Trade Minister meets delegation of Turkish company planning to invest in Egypt    Abdel Ghaffar affirms Egypt's support for the Palestinian health sector    Abdel Ghaffar affirms Egypt's support for the Palestinian health sector    valU Partners with Telda to offer instant cash redemption, instalment solutions to "Sha2labaz" users    Iranian Supreme Leader Ali Khamenei welcomes activating ties with Egypt    Ministers of Environment, Irrigation discuss 'Blue Economy' strategy    Disney's The Little Mermaid live action garners $118 mln on opening weekend    Egypt's Planning Minister tours North Sinai to review development updates    Venice canal mysteriously turns fluorescent green    Ming Dynasty box sold for $358k at auction    Largest intact embalming workshops unearthed in Saqqara, Egypt    Mars swapped plastic wrapper for paper wrapper    Erdoğan wins third presidential term in Turkey after tough run-off    Erdoğan wins third presidential term in Turkey after tough run-off    Egypt unveils ancient mummification workshops, tombs in Saqqara    Egypt unveils ancient mummification workshops, tombs in Saqqara    Egypt's CardoO launches its first IoT-enabled smartwatch    Louis Vuitton revives Renaissance in its Cruise 2024 collection    Xiaomi Q1 revenue falls by 18.9%    The story behind Gayer-Anderson Museum in Cairo    Netflix expands password sharing crackdown to U.S.    Egyptian couple wins at Manchester Open Squash 2023    Italian Open must offer women equal pay – says Jabeur    Irrigation Ministry prepares for maximum water needs period    Irrigation Ministry prepares for maximum water needs period    Egypt's National Dialogue to kick off Wednesday, with no red lines: Diaa Rashwan    President Al-Sisi receives credentials of 13 new ambassadors to Egypt    President Al-Sisi receives credentials of 13 new ambassadors to Egypt    President Al-Sisi receives credentials of 13 new ambassadors to Egypt    Celebrity earnings through Instagram in 2022    Maha Ghanem first female university head in Upper Egypt    U.S. among 34 countries ask for IOC ban for Russian, Belarusian athletes    Egypt's Dalia Mahmoud acts as 1st women prosecutor at court    Russia says it's in sync with US, China, Pakistan on Taliban    It's a bit frustrating to draw at home: Real Madrid keeper after Villarreal game    Shoukry reviews with Guterres Egypt's efforts to achieve SDGs, promote human rights    Sudan says countries must cooperate on vaccines    Johnson & Johnson: Second shot boosts antibodies and protection against COVID-19    Egypt to tax bloggers, YouTubers    Egypt's FM asserts importance of stability in Libya, holding elections as scheduled    We mustn't lose touch: Muller after Bayern win in Bundesliga    Egypt records 36 new deaths from Covid-19, highest since mid June    Egypt sells $3 bln US-dollar dominated eurobonds    Gamal Hanafy's ceramic exhibition at Gezira Arts Centre is a must go    Italian Institute Director Davide Scalmani presents activities of the Cairo Institute for ITALIANA.IT platform    

Thank you for reporting!
This image will be automatically disabled when it gets reported by several people.

Zero car tariffs in place
Published in Al-Ahram Weekly on 03 - 01 - 2019

The final phase of the EU-Egypt Association Agreement that promises the exemption of customs duties on imported European cars came into force this month, resulting in duties on cars imported from Europe falling to zero per cent.
Customs duties on cars with engines of 1,300 cc capacity imported from Europe were eliminated in 2016. For cars with engines of 1,600 cc and above, reductions took place annually at a rate of four per cent until they reached zero per cent this year.
The zero tariffs will also be applied on some Korean and Japanese cars produced in European Union countries.
However, the imported cars will still be subject to VAT at 14 per cent, an 0.5 per cent industrial and commercial profit tax, a three per cent resources development fee, and a one per cent additional tax.
The removal of customs duties has seen several car brands announcing decreased prices to the delight of Egyptian customers. But several car dealers contacted by Al-Ahram Weekly said they had not yet applied the new prices as they are waiting for new cars with the zero tariff to arrive.
An employee at one of the dealers said that a significant price drop would be seen on cars with an engine capacity over 2,000 cc, because the tariffs on them cancelled had reached 40 per cent. However, this category of cars represents only five per cent of the Egyptian market.
Noureddin Darwish, deputy head of the Cars Division at the Cairo Chamber of Commerce, said that cars with an engine capacity of 1,600-2,000 cc would see a price drop of 20 per cent, while those of more than 2,000 cc would see a drop of 23 per cent.
Darwish said the drop in prices would encourage customers to buy new cars, and he expected to see more car sales than in 2018.
Egypt's passenger car sales rose 55 per cent year-on-year in 2018 to reach 14,640 vehicles in October, according to data from the Automotive Information Council (AMIC). They registered a 39 per cent year-on-year increase in the first 11 months of the year, reaching a total of 123,500 units compared to 88,500 in the same period of 2017.
However, Hamdi Abdel-Aziz, former head of the Federation of Egyptian Industries Engineering Chamber, said that a drop in European car prices as a result of the Agreement would be affected by monopolies in the car market in Egypt and the rise in the value of customs dollars.
In December, the Ministry of Finance raised the customs dollar exchange rate for non-essential and luxury goods, including cars, to LE18, tying it to the Central Bank of Egypt's (CBE) dollar exchange rate.
The customs dollar exchange rate had been fixed at LE16 to the US dollar for the past 13 months. It is used to calculate customs duties on imports.
Abdel-Aziz said that no price drops had been seen in previous years, despite the gradual reduction in customs duties. No price drops were seen on cars with engines of 1,300 cc imported from Europe, despite their enjoying zero tariffs since 2016.
European cars were being sold according to their global position and not necessarily their cost, he said, adding that the parent European companies increased the prices of their brands annually.
The EU-Egypt Association Agreement governs trade relations between Egypt and the EU and is modelled on the Euro-Mediterranean Partnership Agreements between the EU and its partners on the southern flank of the Mediterranean, according to the EU website.
It incorporates free-trade arrangements for industrial goods, concessionary arrangements for trade in agricultural products, and the prospect of the greater liberalisation of trade in services and farm goods.
The agreement was signed in Luxembourg in June 2001 and entered into force in June 2004, following ratification by EU member states and Egypt.
It applies to industrial, agricultural and processed agricultural products and stipulates that Egyptian imports of products originating in EU member states shall be free of customs duties, or any other charges having equivalent effect, and free of quantitative restrictions, or any other restrictions having equivalent effect, in accordance with a specific timeline.
For vehicles, all customs duties should be eliminated by 2019, according to the agreement.

Clic here to read the story from its source.