Egypt has approved a draft law allowing for gold imports carried by arrivals to pass through customs free of tax — excluding Value Added Tax (VAT)— for six months, per an official statement published on the Cabinet’s Facebook Page on May 10.
The custom tax exemption extends to semi-manufactured forms of gold, including those used for money circulation and jewelry. However, cultured and natural pearls as well as precious and semi-precious stones are not included in the listed items exempt.
This comes amidst economic uncertainty within the country, which is witnessing a deficit in dollars that in turn reflects consequences on gold exports.
The rising price of gold
Gold prices in Egypt rose by over 50 % since the start of 2023 with 18-Karat being priced at EGP 2,254; 21 Karats priced at EGP 2,630; and 24 Karats priced at EGP 3,006 per gram as of May 3, Ahram reports.
Compared to global prices of gold, which have remained relatively steady, Egypt’s prices have surged. As of May 18, the international gold price per gram stands at $ 63.9, according to the stock market online platform providing real-time data, Markets by Business Insider.
“The increase in gold prices has nothing to do with the exchange rate,” Head of the Cairo Chamber of Commerce’s Gold Division, Hani Milad said in an interview with Ahram published on May 4.
The increase in prices comes as a result of the surge in demand against a limited supply, Milad added.
Gold is used as a stable asset in times of economic instability. As such, when demand increases with investors focusing their interest on gold as opposed to bonds, the prices for gold rise, according to International Banking Group, Standard Chartered.
Following the new draft law for the exemption of gold from custom taxes, Egypt’s first gold investment fund was also announced as per an article by WAYA Media published on May 15.
The fund will facilitate the regulation of mineral investment with Egypt’s Financial Regulatory Authority (FRA) heading the monitoring and regulation of financial markets, not affiliated with banks.