The automotive industry strategy will be issued as a law that includes an amendment to the cars customs tariff, according to head of the exemptions department at the Egyptian Customs Authority Sayed Abdel Rahman.
The law will include an additional tax to offset the decline of customs revenues on imported cars under the European Union, Turkey, and Agadir free trade agreements.
The Ministry of Finance has not yet begun to modify the tariff for cars nor has it set the new tax rate and that the main pillars of the strategy are modifying the tariff, imposing a new tax, and creating an indicative price list for cars.
Abdel Rahman said as soon as the Ministry of Finance amends the tariff, the law will be presented to the presidency for approval and that decisions pertaining to tariff adjustments are not presented to parliament and are only approved by the president. However the new tax will require approval from the parliament.
President Abdel Fattah Al-Sisi held a meeting with Minister of Trade and Industry Tarek Qabil last month, during which Al-Sisi stressed the importance of focusing on the automotive industry by penning a new strategy to stimulate car manufacturers and feeder industries. The strategy aims to increase the rate of local components, boost production and exports, and to drawing new investments.
The Ministry of Trade and Industry presented, during the meeting, its vision regarding the automotive strategy and means to provide more investment incentives for the sector, particularly in light of the promising prospects for job creation and attracting investment.
Qabil said the new automotive industry strategy is currently under discussion and that it will rely mainly on increasing production and exports.
The strategy aims to shift the Egyptian automotive industry from a car-assembling industry to one that fully manufactures them, with a target to boost the rate of local components from 45% to 60% over eight years.