Anwar El-Sadat, Head of Reform and Development Party RDP, expressed disapproval to an expected decision by the Ministry of Finance to increase the Custom tariff on some imported goods described by the government as being provocative. Sadat highlights that such action will not help in resolving the foreign currency shortage crisis, it would even make it worse. Raising customs taxes would push the exporting countries to retaliate and increase the tariffs imposed on the Egyptian goods exported to them. Hence, the already limited Egyptian exports would decline further.
El-Sadat affirms that the root causes for the existing crisis must be directly addressed and effective plans should be implemented so as to improve the competitiveness of Egyptian products in international markets and thus eventually bring the trade balance to a positive territory. The world today is governed by market rules, and thus we must abide by such rules while working to achieve our goals.
In addition, El-Sadat suggests imposing a unified Customs Tariff (10%) on all goods and that such tariff should be collected in Dollars. He adds the reports released by the Ministry of Finance indicate that the total sum of customs collected every year do not exceed 4% of the total sum of imports. Hence, the whole system governing customs should be changed toward a simplified mechanism that would increase the sum of the customs taxes, eliminate the tax evasion phenomenon. And improve our image and credibility in the eyes of the foreign and local investors.
El-Sadat finally said that there could be a need to impose additional taxes on some cluster of goods such as cigarettes, alcoholic drinks, etc. but that should be done independently from tariff collection.
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