By Ahmed Farahat
The draft of the new customs law will be completed within the next two weeks and will include terms addressing customs exemptions, said Magdy Abdel Aziz, Head of the Customs Authority.
Abdel Aziz is hopeful the law will be issued before parliamentary elections, since it does not include many terms. Moreover, the law was discussed previously with businessmen and the Federation of Egyptian Industry (FEI), and there an almost consensus on its terms.
Abdel Aziz said that the draft law toughened penalties for smuggling operations with an article stipulating restrictions and strict financial penalties as a deterrence for violators.
Crimes of imported shipments smuggling would lead to harsh penalties including fines of between EGP 5,000 and EGP 50,000. It will also include imprisonment for a period between 1 year and 5 years, in addition to compensations equal to double the custom tax. If the smuggled goods are among the prohibited items, the compensation is double the custom tax or double the value of the goods, whichever is greater.
Abdel Aziz added that the draft law will allow payment of taxes in instalments to encourage investors. A postponement of customs tax payments for one month will also be allowed, in return for letter of guarantee submitted by the importer. Abdel Aziz added that using electronic means in submitting documents and paying tax will be instated.
He said the law will apply a new service system for those who deal with the authority, known as an economic actor, depending on cooperation between the authority and the member states. This comes in light of securing movement of goods in the international supply chain and combating all kinds of illegal trade. The new system also includes cooperation between private sector parties within the system, like importers and exporters on one side, and the authority on the other side, in procedures of dealing with their shipments in customs ports.
Abdel Aziz added that he is investigating shifting to the customs single administrative document (SAD), which consists of a simple form where the client registers his details to facilitate the process between dealers. He confirmed that this will not be implemented until next June to accredit the system through the reunions between directors of the international customs in Brussels.
Abdel Aziz said that there is a bid to export 71 scan devices estimated at EGP 65m, according to the American aid dedicated for this purpose. The bid will be announced by 21 April, settling on one of the four companies taking part in the bid. Abdel Aziz announced that within one year, the scan devices will be used in all customs ports to eliminate smuggling. This is in addition to a contract with an Egyptian company to install devices that monitor the usufruct for the transit containers.
Abdel Aziz added that there will be electronic exchange between the entity and banks concerning ‘model 4’. In the past, ‘model 4’ was presented by the importer until 130 forged cases were discovered. This required an exchange between the entity and the bank to prevent this from happening again.
The entity should be connected to the Egyptian Tax Authority in order to avoid this occurrence. Around 11,500 customs dealers are not registered in the Tax Authority in the past four years. One of these dealers imported 1600 shipments per year and did not pay any taxes for this amount while all these shipments were for trade purposes.