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Car prices on the rise by 2-7% alongside application of VAT - Daily News Egypt

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Car prices on the rise by 2-7% alongside application of VAT

AMIC chairperson demands that the government issue the executive regulations of the VAT law to prevent unreasonable price rises A

Chairperson of the Automotive Marketing Information Council (AMIC) Raafat Masrouga said the application of value-added tax law (VAT) will solely affect the final consumer. He added that VAT will increase car prices, expecting a 2-3% increase in the prices of cars with 1,600CC engines up to 2,000CC engines.

The prices of locally-manufactured cars with 2,000CC engines or higher will increase by the same ratio. Imported cars with 2,000CC engines or higher will be 4-5% more expensive.

Masrouga called for the immediate issuance of the VAT law’s executive regulations to avoid the rise in prices, adding that it should slightly affect the prices.

He pointed out that car agents will pay a 14% tax rate on imported cars. The VAT will be applied on the distributor, who will increase the price of the cars so the final consumer will bear the price increase.

Masrouga said that the VAT protects the domestic car manufacturers with 2,000CC engines or higher.

Daily News Egypt obtained the proposed VAT rates on cars. It will include a 14% general tax rate and a 1% VAT on cars with engines lower than 1,600CC, except three-wheeled vehicles.

The cars with 1,600-2,000CC engines will endure a 15% VAT rate, while the VAT rate on locally-manufactured cars with engines higher than 2,000CC will reach about 15%, and imported cars in the same category 30%.

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