Egypt- Customs exemption rediscovers the 1300 CC cars
Date
1/19/2016 3:53:11 AM
(MENAFN- Daily News Egypt) The recent news published by Daily News Egypt on the expected exemption of European cars of less than 1,300 CC engines from customs tariffs has led to panic in the market.
Daily News Egypt reported that the Customs Authority would be exempting cars of European-origin with capacities of 1,300 CC or less from customs in compliance with the EU-Egypt Association Agreement, according to a source at the Ministry of Finance.
However, the ensuing confusion in the market suggests existing distrust between car agents and the government. Car manufacturers had expected the agreement to fall through, and for the government to introduce new rules through the automotive industry strategy. They also expected the government to attempt to circumvent the expected decline of resources from reducing customs by imposing new taxes.
However, dealers and agents appear to be unaware that, in 2008, when the agreement was signed, the Egyptian Customs Authority divided the agreement into a number of terms, the most prominent of which designates the 10% customs cuts over several categories.
The first category includes cars with engine capacities ranging from 1,300 to 1,600 CC. The second category includes cars with engine capacities between 1,600 CC to 2,000 CC or more. As for cars with engines of 1,300 CC or less, the cuts were set to 15% per year.
At the time, no one predicted the breakthrough in the motor industry in 2014, which saw international automotive companies introducing engines with a "Turbo" capacity of 1,200 CC.
As the agreement came into force in 2008, customs cuts on 1,300 CC models reached 100%, as confirmed by the head of the Agreements Department at the Egyptian Customs Authority, who did not expect that there would be a large influx of European cars in this category and hat they would therefore be subject to the cuts.
He added that the authority contacted the Ministry of Trade and Industry, as the signing party on behalf of Egypt, seeking a memorandum directed to the authority to activate the exemptions for the first category, less than 1,300 CC, and to begin applying the cuts on the second category, 1,300 CC to 1,600 CC).
2019 is expected to be a decisive year, as all European cars are expected to be exempted from customs, according to the agreement.
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