Morsi gets tough with the caviar classes

President Morsi has issued a decree raising customs tariffs on 100 'luxury goods', including shrimps, caviar and chewing gym. The move comes as the Egyptian government struggles to reduce its balance of payment deficit and raise state revenues to bridge the government funding gap. The decree issued on Sunday raises customs tariffs by 5 percent to 40 percent on items including sunglasses, watches, nuts, boats and videogames. A two percent tariff was levied on materials used to manufacture baby milk formula. A 20 percent tariff was placed on all equipment imported by tourist establishments, excluding automobiles. The Egyptian pound has lost some 10 percent of its value since the beginning of 2013, after the central bank ceased to freely support the local currency due to a sharp drop in foreign reserves. Tariffs on imported cars that run on natural gas or electricity, however, will be reduced by 25 percent and tariffs on imported parts in assembly industries will be reduced by 10-90 percent depending on the local component in the final product. Egypt's Balance of Payment (BOP) deficit has mushroomed since 2011 as tourism, a major currency earner, came to a near halt after the uprising that toppled president Hosni Mubarak. The BOP deficit dropped to $551.5 million in the second half of 2012 from an $8 billion deficit in the same period the previous year. This is far from pre-uprising rates when there was a balance of payments surplus of almost $570 million during the 2010/2011 fiscal year. Albawaba Business