Raising the customs dollar price affects imported goods

Dr. Sayed Qassem, a member of the Egyptian Association for Political Economy and Legislation, said that the economies of the entire world are in a state of threat due to the inflationary wave that is roaming the world, which requires all markets and economies of the world to prepare the sail of the economic ship to seek in the opposite direction to curb the forces of inflation.

He stressed that the foreign currency is flying in the skies of the economy with all its strength at the present time against the local currency, but the Ministry of Finance is using one of its mechanisms to support the cost of production and reduce the customs dollar as much as it can, but at the present time, the budget may vote in the need to intervene because it cannot bear more than their capacity.

He explained that with regard to the customs dollar, it is a mechanism established by the Egyptian Ministry of Finance with the aim of fixing the price of the dollar in Egyptian pounds when calculating the customs due on imported goods, with the aim of reducing the effects of inflation after the liberalization of the exchange rate of the pound in late 2016. The importer gets hard currency in order to import his goods, but the importer is subject to the currency rate in the banks, and therefore the customs dollar is used in order to determine the customs duties on the goods.

He added: It is expected that the increase in the price of the customs dollar will be reflected in the specific customs duties on imported goods and thus on the cost of production or the provision of these goods in the markets, which leads to an increase in their prices above the real value of the imported goods. We now see that an important question must be called: What is the impact of the rise in the customs dollar on stagflation? In the context of the above, the effect of raising the price of the “customs dollar” will vary between imported products, as it will not lead to a significant increase on imported raw materials, which are subject to either customs exemption or a tax of 2-5%, but increasing the price of the customs dollar to 19.31 pounds will lead to an additional cost. On the importer, on the other hand, the increase will affect the imported products in general, to a varying rate of increase, on which the tariff price is imposed as large as durable goods, but in the end it will only be borne by the last consumer.

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Source: الحرية نيوز by alhoreyanews.com.

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