The head of the Egyptian Parliament’s industrial committee, Farag Amer, opposed the government’s decision to impose extra fees on investors operating Egypt’s free zones.
Earlier this week, the board of the General Authority for Investment and Free Zones (GAFI), affiliated to ministry of investments, issued a decision to impose extra fees on investors operating in free zone areas starting from 2020. The decision included an increase of 42% on industrial activity, 28.5% for storage and service activities, and 20% for the used car trade sector.
Amer expressed rejection for the decision and said that the move represents a negative development for the investment climate in Egypt, especially since the investment climate has begun to recover slightly, and number of investors wishing to invest in Egypt have also begun to increase.
“This is a very negative decision which will be a setback for Egypt’s investment climate that began to recover in the last few months,” Amer said.
Amer said that the increase coincided with the increasing number of investors wishing to establish companies in Egypt, and following the issuance of a number of decisions from July 2018 until the end of June 2019 to create a good investment climate which were all declared in response to some suggestions and complaints of investors in order to improve the conditions of free zones.
Moreover, Amr Al-Gohary, a member of the committee, said the government is moving in the opposite direction to the Egyptian economy, as the state seeks to encourage investment, while the ministry imposes additional fees on investors.
He also said: “the volume of direct investments is very low and therefore any decision that doubles investment costs will be counterproductive leading to decreasing number of investors in Egypt.”
Al-Gohary concluded that he would submit a request to the ministry of investment and head of GAFI to inquire the reasons behind this decision and its impact on the investment climate in Egypt, especially under the implementation of the current economic reform programme.