Egypt.. A parliamentary committee agrees in principle to exempt 4,000 cars for young people from taxes

- An Egyptian parliamentary committee approved in principle a draft law requiring the public treasury to bear the taxes and fees owed on 4,000 cars designated for the national youth employment project, which is implemented by the “Long Live Egypt Fund,” with the aim of reducing the cost of young people’s access to vehicles and helping them establish income-generating activities. The committee postponed discussion of the project’s materials to a later meeting. The project includes the provision of 3,000 taxis running on natural gas and 1,000 semi-transit vehicles, to be purchased by the “Long Live Egypt Fund” and offered to young people at reduced prices and a low-interest installment system that includes car insurance and the risk of non-payment.

The approval came during a meeting of the Plan and Budget Committee in the House of Representatives, in the presence of representatives from the Ministries of Finance and Interior, the Fund, the Small and Medium Enterprises Development Agency, and the Egyptian Tax Authority. A representative of the Ministry of Finance said that the public treasury would bear one billion pounds allocated to the initiative, while the committee asked the ministry to submit a study on the criteria for selecting the beneficiary governorates. The government representative explained that the project would include the 27 governorates, taking into account traffic density, population, and income level, according to local media.

To benefit from the project, the applicant must be between 25 and 50 years old, have at least an intermediate qualification, have performed military service or been exempted from it, hold a second-class professional driving license, and have no other source of income. Under the draft law, the public treasury bears five categories of taxes and fees imposed on cars and their imported parts used in their local manufacture, including customs tax, value-added tax, schedule tax, stamp tax, and a fee for developing the state’s financial resources.

The project prohibits the beneficiary from disposing of the car or using it for a purpose other than its intended purpose for a period of seven years from the date of the issuance of the first operating license or the end of the installments, whichever is later. In the event of a violation of this, the beneficiary loses his right to the car and is obligated to return it to the “Long Live Egypt Fund.” A member of the House of Representatives' Planning and Budget Committee, Amal Abdel Hamid, said that she supports the draft law in terms of its goal of providing job opportunities for young people and helping them secure sources of income, but she believes that directing support to productive projects and small industries should be a greater priority.

Abdel Hamid explained, in exclusive statements to Ufoq News in Arabic, that she supports young people to establish small industrial projects, especially in industries complementary to major industries, instead of directing support to transportation activities alone. She also believes that this trend can contribute to increasing local production and reducing dependence on imports, as well as providing young people with practical experience in the fields of manufacturing. She stressed that her reservation does not mean rejecting the initiative or objecting to providing job opportunities for young people, but rather relates to the priority of directing resources to activities that add to the productive base of the economy. She also stressed the need to allocate a percentage of cars for people with disabilities, noting that providing vehicles that can be operated in an income-generating activity may provide them with job opportunities and support their economic independence.

Regarding the final cost of tax exemptions and fees, Abdel Hamid said that the committee has not yet received a final estimate, and that the Minister of Finance is expected to clarify the total amount that the public treasury will bear. She added that ensuring that young people benefit from the exemptions requires setting executive rules that clarify the extent to which they are reflected in car prices and installments due, explaining that the committee’s approval in principle does not mean the start of implementing the law.

The draft law stipulates that the Prime Minister shall issue a decision specifying the vehicles and their parts subject to its provisions, and the rules and procedures for its application, based on the proposal of the Minister of Finance and after coordination with the relevant authorities. The law shall not come into effect until after completing the legislative procedures and publishing it in the Official Gazette, provided that it takes effect from the day following publication.