Egypt Independent

Finance mulls duties on car guarantees



The Finance Ministry is thinking about levying customs duties on imported car guarantees, according to sources at the automobiles department at the Union of Egyptian Chambers of Commerce.

Car dealers, however, warn that such a move would serve to raise retail prices and bite into sales.

“Between LE3000 and LE5000 of a car’s total retail price, which is set aside for guarantees and maintenance, is currently precluded from customs duties,” explained Alaa el-Saba of the automobiles department. “This is in order to encourage investment in after-sales services.”

“Seaport customs have already stopped releasing imported cars until an official decision on the matter has been issued,” el-Saba added, going on to predict that a resolution would be issued within days.

“Car dealers were forced to reduce their profit margins as a result of the global financial crisis in order to sell their inventories,” noted the automobile department’s Omar Balba. “The new resolution will cause a repeat of the poor sales rates they suffered in the immediate wake of the crisis.”

“Car dealers will have no choice but to increase their after-sales service charges,” said Walid Tawfiq, also of the chamber’s automobiles department.

Translated from the Arabic Edition.