The Egyptian government on Thursday approved a draft law granting Egyptians working abroad the right to import a private car exempt from taxes and fees, in return for paying a cash amount in foreign currency and recovering it after five years from the date of payment, according to specific conditions.
According to a statement by the Egyptian Cabinet, the draft law states that “Egyptian who has a valid residency abroad has the right to import one private passenger car for personal use, exempted from taxes and fees that had to be paid to release the car, including value-added tax and tax schedule, in accordance with the rules and provisions stipulated in this law.”
The Executive Director of the Automobile Manufacturers Association Hussein Mostafa said that this permission came in the interest of Egyptians residing abroad, to enable them to enter their cars that they used abroad at prices lower than the prices of cars in Egypt.
He explained that this would be in return for placing a deposit in foreign currency in one of the banks affiliated with the Finance Ministry for a period of five years, in order to provide foreign currency in the Egyptian market to reduce prices in the Egyptian market.
Mostafa added that in the event that thousands of cars enter the Egyptian market through Egyptians residing abroad, most of them will be for personal use, and some of them may be sold by a decision of their owners inside Egypt.
He said that this decision will have a limited impact on the used car market in Egypt, but will not impact the new car market in Egypt.
The brand new car prices are affected by the import and entry of large numbers of new cars after a period of stopping their import since last February, Mostafa added.
Car prices to decline
Khaled Saad, Secretary-General of the Automobile Manufacturers Association, explained that the draft law will bring about a significant decrease in car prices to increase the supply, in addition to increasing the country’s US dollar proceeds, in light of the current crisis in hard currency with the cessation of car imports.
He pointed out that there is a significant increase in car prices in the Egyptian market against the backdrop of the dollar crisis and the opening of documentary credits for import, as well as the scarcity of cars in the Egyptian market. This will open new horizons for increasing car market in Egypt, Saad said.
Saad pointed out that the decision would cause a major movement in the car market following the seven months during which the sector suffered from stagflation in light of the scarcity of cars supply, and addressing the overprice phenomenon, in addition to stopping the import movement in the markets due to the lack of foreign currency.
Car expert Ahmed Bahaa Eddin stressed the importance of the draft law for the car market, as it would contribute to addressing the overprice phenomenon.
However he expressed concerns that traders would exploit it by importing cars for their benefit in the names of Egyptians abroad, which requires the state to take the necessary precautions to prevent exploitation.
Edited translation from Al-Masry Al-Youm