During her foreign tour, Soha Gendi, the Minister of State for Emigration and Egyptian Expatriates’ Affairs, met with Egyptian communities in Saudi Arabia and the United Arab Emirates. She urged them to vote in the presidential elections in 2024 and to invest in Egypt.
The most common inquiry she received concerned the initiative to import cars from other countries by Egyptians. Many expats proposed ways to increase their participation in the initiative and increase foreign currency inflows.
One of the demands was to equalize or reduce the difference in deposit amounts for cars with 1600 CC engines and those with 2000 CC engines in the Gulf region. Minister Gendi stated that she had contacted the Ministry of Finance and that they had agreed to look into the matter.
She explained that Presidential Decree No. 218 of 2022 and its amendments established different customs tax rates based on the liter capacity of passenger cars with internal combustion engines. Cars with liter capacities up to 1600 CC faced a 40% customs tax, while those with capacities greater than 1600 CC faced a 135% customs tax.
She also mentioned that Law No. 14 of 2023, which amended Law No. 161 of 2022, reduced the customs tax by 70%, necessitating only a 30% payment. This change aimed to meet Egyptians’ requests for equal treatment with countries that had a full exemption under trade agreements with Egypt, particularly in Gulf Cooperation Council countries.
Depending on the liter capacity, the lower customs tax resulted in different reductions in total customs and tax obligations. Cars with capacities up to 1600 CC saw a 50% reduction, those with capacities up to 2000 CC saw a 58% reduction, and cars with capacities above 2000 CC saw a 54% reduction.
Another point raised was the possibility of newly hired expatriates benefiting from the car import initiative. This would allow them to submit an authenticated work contract instead of a bank statement, and the car import would be delayed until they could provide the bank statement. It would also exempt the wives of expatriates in Gulf countries from the residency requirement, and visit documents issued by the host country would be accepted as temporary residency.
The Finance Ministry responded that Law No. 174 of 2023 allowed Egyptians with legal residency abroad who had not previously benefited from Law No. 161 of 2022 to do so if they met all of the conditions. They had three months from the start of work to pay the due amount in foreign currency.
The second article of the same law stated that to qualify, they must have legal residency and a bank account in another country open for at least three months, as well as pay the required amount during the specified employment period. Because Law No. 174 of 2023 went into effect on October 30, 2023, for three months and could be extended, any changes to it could be postponed until the end of its validity period.
The Ministry of Finance has responded to some complaints and proposals from Egyptians living abroad regarding the initiative to tax-free import cars for relatives.
Some expats who imported cars before the 70% tax reduction were unable to reclaim the deposit difference. The Ministry of Communications and Information Technology announced that beginning on December 6, 2023, an application for refund requests would be available to those who met the legal requirements. Many eligible people have already received their refunds.
Another idea was to allow expatriates to buy cars from local dealers rather than just duty-free zones. The Ministry of Finance said it was looking into this proposal, which called for the creation of a dollar account for each local dealer that would be managed by the ministry.
Expatriates would deposit the car’s value in foreign currency into this account, which would then be transferred to the bank of the local agent for the issuance of documentary credits. Local agents would negotiate longer payment terms or faster payment discounts with foreign suppliers. Any savings would be shared or returned to the state.
The ministry stressed that the transfer to the local agent’s account would take place only after the citizen received the car at the deposited price, with no additional fees. It also stated that it would choose a list of local dealers and car specifications based on fair and competitive prices and that they would be exempt from any costs that could increase the car’s value. It encouraged local agents to provide promotional services to gain more customers.
Furthermore, the ministry stated that it was coordinating with Egypt’s Central Bank and the Ministry of Trade and Industry to review the proposal following import regulations and the responsibilities of local agents as importers.
The car import initiative is part of a law that grants certain benefits to Egyptians living abroad and is overseen by a committee established by Prime Ministerial Decree No. 4270 of 2022. Representatives from various ministries, the Central Bank of Egypt, and the National Bank of Egypt serve on the committee.
