In a bid to boost competitiveness and domestic consumption Egypt will cut its average customs duties by a 25%, Finance Minister Yusef Boutros-Ghali said on Feb. 6. The reduction will bring average tariffs to 6.9%, down from the current level of 9%.
The decision means that tariffs on 90% of imported goods, including agricultural produce, refrigerators, heaters, televisions and ready-to-wear clothes, will be less than 10%.
The remaining exception will be cars, which will continue to face a 40% tariff to protect domestic vehicle manufacture.
The decision comes as record inflation, measured at 12% in December, has battered Egyptian consumers who have seen prices on most foodstuffs soar in the last few months.
The measure will cost the government 1.4 billion Egyptian pounds (US$250 million) in lost customs revenue, Boutros-Ghali said, adding that the losses would be recouped from resulting increased economic growth.
It is the second major cut in tariffs since Prime Minister Ahmed Nazif took power in 2004 promising reforms to end years of stagnant growth.
In 2006, Egypt's economy grew by 6.9%, compared to around 3% in 2003.
Copyright Agence France-Presse, 2007