Tax on copybook imports to double
Decision to support local paper makers
Customs fees on imports of copybooks will be raised by an additional 20 percent, a recent Cabinet decision said. It said the additional fees will be applied for two years.
Raising fees on imported paper copybooks came in response to calls by local paper manufacturers to protect their produce from dumping by cheaper imports. The decision, published on October 11, was effective immediately.
The decision raises fees on copybooks’ imports from all countries, except for European Union and Arab States, from 20 to 40 percent. It raises fees on imports from EU countries from 12.8 to 32.8 percent. All goods imported from Arab countries are not subject to any customs fees according to the free trade agreement.
“Imports from the far east countries, mainly Indonesia, are hurting our local industry because of the big difference in production costs,” said Ziad Bekdache, chairman of the Oriental Paper Products (OPP).
Imports of copybooks have increased by 42 percent in 2010 compared to 2009, as per a study issued by Oriental Paper Products (OPP). These imports reached 470 tons, valued at some $1 million, in 2011. According to Bekdache, the increase in imports was triggered mainly by a drop in customs fees, and an increase in demand on cheaper imports. Prices of locally-made copybooks were 27 percent higher than those of imported ones in 2009. “Our production costs grew by around 50 percent in the past five years due to higher fuel prices and increase in wages and salaries,” said Bekdache.
There are some 13 paper products factories locally. The production capacity of the three biggest factories is around 3,000 tons per year for each, according to Bekdache. “Factories are not producing huge amounts, though they have the capacity to, because the market cannot absorb them all,” Bekdache said. The local market currently absorbs around 3,000 tons each year, of which some 20 percent are imported. Local factories export about 30 percent of the production.
Bekdache said local manufacturers have been lowering their prices through cutting their profitability: “Although we have higher costs, we are currently selling our products at the same prices of imported ones.” Prices of local copybooks were 3.7 percent less than prices of imports in 2010. “Our profitability currently ranges between three and ten percent, but some factories are bearing losses,” said Bekdache.
Date Posted: Oct 15, 2012