Egyptian Government has begun the process of implementing higher tariffs on 320 commodities including fruit juices and ice cream with the aim to reduce imports and boost local production, the Finance Ministry said.
The Government of President Abdel Fattah al-sisi passed a decree to increase tariffs with the objective of creating the necessary climate to attract investment into the country and give a strong boost toward increasing productivity, as well as cutting imports.
Egypt moved to a floating exchange rate system in November in a bid to attract foreign investments. They also abolished the black market rate and two other exchange rates.
The measures were part of crucial steps required by the International Monetary Fund (IMF) to approve a $12bn loan for the country, which has seen its foreign reserves plummet in recent years.
Other measures included cutting fuel subsidies and announcing a value added tax (VAT).
Before these steps were taken, the country had faced severe dollar scarcity over the past year, which drove up the prices of imports; local production suffered due to the need to import parts or raw materials to produce finished goods.
The severe economic hardship the country has seen is due to a decline in tourism, low foreign investments and decreased revenue from the Suez Canal.
Egypt relies heavily on imports to meet large parts of its food needs. The country currently has a trade deficit of more than $49bn and the aim of the increased tariffs is to slash the deficit.
According to the government’s Gazette, the custom tariffs on juices rose from 5% to 20%, while tariffs on ice cream increased from 40% to 60%.
The government said that the new tariffs do not violate Egypt’s obligation to the World Trade Organization (WTO). “The tariffs are in line with the stipulated rates,” the statement read.
The statement further noted that items imported from countries that have free trade agreements with Egypt will be exempted from the increases or the custom tariff. These includes countries in the European Union, Arab countries, Turkey and the COMESA (Common Market for Eastern and Southern Africa).