As part of the upcoming Egypt government’s mobile phone localization efforts, imported devices may be subject to 37.5% duties and taxes (including a 5% development tax), a government official told EnterpriseAM. The official said the National Telecommunications Regulatory Authority (NTRA) and the Ministry of Finance are finalizing the regulations, and the decision will not be applied retroactively.
When a phone is activated with a new sim card, users have a three-month grace period before receiving a notice to immediately pay the duties and taxes. If payment is not made, the service will be terminated, the official said. Once the user pays the required fees and registers the phone’s serial number, the device will start functioning normally.
The government is considering setting exemption limits depending on the value of imported mobile phones. The proposed fee would apply to phones costing more than 15,000 Egyptian pounds, the official added. Egyptian expatriates, tourists and non-residents are exempt from the rule unless they establish permanent residence in the country.
One of the aims is to combat smuggling. Egypt faces high levels of mobile phone smuggling, the source said. 99% of the phones currently in use in Egypt are unregistered, costing the state annual losses of 5-6 billion Egyptian pounds.
Local businesses’ performance could also be boosted: Egypt’s mobile phone imports grew 6.4% in the first seven months of the year compared to the same period last year, according to state intelligence agency Kapmas. The increase has prompted local companies to complain to the government that the import focus and smuggling problem have made them uncompetitive.
The government is looking to further localize mobile phone manufacturing: The Ministry of Finance and the Ministry of Central IT are preparing an initiative to offer incentives to local mobile phone manufacturers, with the aim of increasing the number of mobile phone parts produced locally. The ministries and companies are currently drawing up a five-year plan to produce 100 million devices a year, 25 percent for the domestic market and 75 percent for export
