The Egyptian Finance Ministry is currently studying increasing sales tax on cars to compensate for the decrease in custom tariffs, which will be applied in line with Egypt’s bilateral agreements with the EU which will bring custom tariffs on imported European cars gradually to zero by 2019, newspaper Al-Borsa reported on Tuesday.
Meanwhile, the current sales tax is divided into four categories: the first one is 15% on cars less than 1,600 cc, 30 percent on cars ranging from 1,600 to 2,000 cc, 45 percent on imported cars more than 2,000 cc, and 30 percent on locally manufactured cars more than 2,000 cc.
On a related note, the ministry will study providing incentives for the local industry to compensate for the increase in taxes.
In mid-December, the minister of trad and Industry, Mounir Fakhry Abdel Nour, said that Egypt has decided to begin protectionist measures to face a sudden rise in automotive batteries imports in a bid to embolden local production.
"The automotive industry in Egypt are witnessing a boom as auto sales by the end of 2014 are expected to reach 295,000 cars compared to 260,000 cars in 2010."
