The head of Parliament’s Planning and Budget Committee, Dr. Fakhry al-Fiqi, expects the law to help increase Egypt’s foreign exchange assets by $5 billion.
The Egyptian government aims, through the law to grant some concessions to Egyptians residing abroad, to increase their remittances, which represent one of the most important sources of foreign exchange for the country, and the will to obtain the maximum benefit from these remittances , both for the state and for Egyptians residing abroad, according to the bill’s memo.
The head of the Parliament’s Planning and Budget Commission said that the number of Egyptian workers abroad is close to 12 million, of which half, according to official estimates, are the countries of the Arab Gulf After the government approved the implementing rules of the provisions of the law which grants certain concessions to Egyptians residing abroad.
Egyptians’ remittances abroad amounted to $31.9 billion in the 2021-2022 fiscal year, compared to $31.4 billion in the 2020-2021 fiscal year, a growth rate of 1 .6%, according to data from the Central Bank of Egypt.
Fakhry Al-Fiqi said the aim of the amendments to the law is to achieve the interest of the three parties. The first: Egyptians abroad by facilitating the procedures for importing aautoin addition to other concessions already issued to provide land and housing units to this category through the Homeland Initiative. The second: the State benefiting from the increase in foreign currency and the increase in remittances from workers abroad. Third: the Automobile Market to resolve the crisis of lack of supply of motor vehicles, which leads to the reduction of the phenomenon of the overcharge, i.e. the imposition of an additional price in exchange for the immediate delivery of the machine.
In 2012, the Egyptian government launched the Beit Al-Watan project for overseas Egyptians to provide housing units and land in payment change in foreign currency. Eight phases of this project were initiated, providing more than 22,000 residential lots and thousands of housing units.
Al-Fiqi expected that around half a million Egyptians living abroad would benefit from the import facilitation of cars with an expected deposit value of $5 billion, which would help boost Egypt’s cash reserves, which is a value greater than the funding it receives from the International Monetary Fund, in addition to which this value is expected to increase, the government obtains it within 4 months of the implementation of the executive regulation of the law, issued on Monday, which increases the volume of the currency supply foreign.
Egypt has reached an agreement to obtain loans worth $9 billion, including $3 billion from the International Monetary Fund, $1 billion from the Sustainability Fund and $5 billion from development partner countries.
Al-Feki indicated, in exclusive statements to CNN in Arabic, which residents of European countries have a preference due to its association with Egypt with a free trade agreement (free of customs), which reduces the value of the deposit that will be deposited in the banks, in as residents of European countries, they will only deposit for taxes and fees, without paying customs, to the account of the Ministry of Finance for a period of 5 years without return.
Since the beginning of 2019, the Egyptian government has exempted the auto of European origin from customs tariffs, in order to activate the partnership agreement between Egypt and the European Union.
Alaa El-Saba, a member of the Automotive Division of the General Federation of Chambers of Commerce, believes that a limited number of Egyptians abroad will benefit from the passage of the law allowing the import of cars exempt from customs for two reasons. The first is the decrease in the volume of the supply of auto abroad due to the ongoing crisis of electronic chips and the Russo-Ukrainian war, and the second: the period for transferring the deposit of theauto imported against taxes and customs is very short , in addition to that the government has restricted the importation ofauto only from countries in where the Egyptian resides abroad, and not from Other countries are exempt from duty.
The rules governing the importation of passenger cars by Egyptians abroad stipulated that the amount in cash owed was transferred, immediately after registration of theauto on the designated platform, to the government bank account within 4 months of the entry date in force of the provisions of the provision, then by filling in the bank transfer data and uploading the document to the platform, indicating it electronically.
As regards the effect of the application of the law on the prices of auto in Egypt, Al-Saba said, in exclusive statements to CNN in Arab, that the cost prices for agents and distributors are very high, which has been reflected in the prices of auto and led to the disappearance of the “excessive price” phenomenon, excluding the importation of a large number of off-the-bill cars.
He added that despite the central bank’s decisions to ease imports and implement a system of floating exchange rates, the offer of auto in the market is still low and has linked the return of imports to an increase in the supply of foreign exchange through government success in attract new foreign investment.
According to data from the Egyptian Automotive Market Information Council (AMIC), the sales volume of auto fell to 148.5 thousand auto in the period from January to August 2022, compared to 186.3 thousand auto in the same period last year, a decline of 20%.