31 Jan. - 6 Feb. 2002
Issue No.571
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Al-Ahram Weekly Online 31 Jan. - 6 Feb. 2002 Issue No.571 |
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No longer free
WITH AN overwhelming majority, the People's Assembly approved last week a government decree aimed at annulling a 1976 law which granted the Suez Canal city of Port Said duty-free status in appreciation of its historic and unwavering nationalist struggle against foreign forces.
Addressing the Assembly on 21 January, Finance Minister Medhat Hassanein said the decree comes at an appropriate time, serving as a protection measure for the local textile industry from the vagaries of smuggling and the challenges posed by cheaper, imported counterparts.
A report prepared by the parliament's economic affairs committee also indicated that the objective behind making Port Said a free-trade zone in 1976 was a founding pillar for its envisioned future as a full-blown export-led industrial city.
"This objective was never realised while Port Said turned out to be a major source of smuggling cheaper imported clothes and ready-made garments into the country," the report said. "Not only did this pose great threats to the local textile industry, but also deprived the state treasury of millions of pounds in custom duties."
The report added, however, that the government does not call for an automatic annulling of Port-Said's free-duty zone.
"The duty-free zone of Port Said will be phased out within five years. During this period, the government vowed to turn Port Said from a commercial centre into an industrial and tourist point so that the citizens of Port Said will find jobs to make a living," the report said.
Exporters subsidised
CITRUS exporters will be provided with a financial subsidy of $75 dollars per ton, according to a recent decision by the Ministry of Foreign Trade in collaboration with the Agricultural Commodities Council, reports Shaimaa Labib
The subsidy will be confined to citrus exporters serving Eastern and Western European markets, East Asian, African and American markets.
Ali Eissa, chairman and managing director of Nahdat Misr Company for Agro-industries, a prominent exporter, hailed the decision as a step towards enhancing citrus exports. "Although the decision was issued after the beginning of the citrus exporting season, which is in November, it is an unprecedented means of boosting citrus exports," Eissa said.
He added that this decision conforms to World Trade Organisation (WTO) stipulations to which Egypt is party. "The WTO has a stipulation which allows developing countries to offer financial subsidies to increase its exports," he said.
For exporters to benefit from this subsidy, they have to show the General Authority for Export and Import Monitoring their export approval from the Customs Authority, an authorised shipment invoice and a statement of the amount of exports and their destinations. The Authority will then issue cheques for the amount of the subsidy which can be drawn from the Egyptian Bank for Export Development.
According to Eissa, the subsidy is to be financed from a fund established after Prime Minister Atef Ebeid's decision to enhance Egyptian exports. Ebeid is expected to meet a number of agricultural exporters this week to discuss additional means of increasing their exports.
Taxpayer help
THE SALES Tax Authority (STA) has established a "Taxpayer Service Department" to give taxpayers any technical support they may need when submitting their reports to the authority, reports Sherine Nasr. "Well-trained accountants and lawyers have been appointed who can give taxpayers legal consultation, help supervise tax reports and answer different questions. The services are done for free," explained Mahmoud Mohamed Ali, head of STA.
The authority has also printed some 13 booklets that include the necessary information for dealing with registration, taxable activities and penalties.
Ali says that the tax invoice is the cornerstone of success for the second and third phases of the sales tax. He says, "Almost 80 per cent of the targeted groups have already been registered. They have come of their own free will -- a positive sign."
The STA has been providing taxpayers with a variety of incentives to help them react positively to the second and third phases of the sales tax imposed in June 2001. As well as technical support, a six-month grace period had been granted for traders and owners of service companies to register with the authority. "Starting 2002, the grace period came to an end. Those who have not voluntarily registered, will be subject to the strict penalties stipulated by the law," observes Ali.
In the meantime, the STA has opened channels of dialogue with trade unions and business associations. The aim is to notify them before legal action is taken against a member who may be accused of tax evasion.
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