In a decisive move to combat the rampant smuggling of mobile phones and bolster local manufacturing, the Egyptian government introduced a 38.5% customs tax on imported mobile devices, which took effect on January 1, 2025. Prime Minister Mostafa Madbouly emphasized that the substantial influx of smuggled devices has necessitated such measures to regulate the market and foster the growth of domestic industries.
To facilitate compliance with the new tax regulations, the government has launched the “Telephony” app. This application allows individuals to register their imported mobile phones, ensuring proper documentation and fee payment. Users are required to input their device’s International Mobile Equipment Identity (IMEI) number, after which the app calculates the applicable customs fees, payable online. A grace period of 90 days is provided for registration and payment; failure to comply will result in the device being blocked from Egyptian networks.
The tax applies to mobile phones imported into Egypt from January 1, 2025, onwards. Devices purchased or activated before this date are exempt, as the policy is not retroactive. Foreign visitors using non-Egyptian SIM cards are also exempt from these taxes, aiming to avoid inconveniences for tourists and short-term visitors. However, Egyptians arriving from abroad with imported phones must register their devices through the Telephony app within 90 days of arrival to avoid service disruptions.
The introduction of this tax and registration system underscores the government’s commitment to curbing illegal smuggling activities, which have significantly impacted the local market and resulted in substantial revenue losses. By enforcing these measures, the government aims to create a level playing field for local manufacturers and ensure fair competition within the mobile phone market.
Consumers are encouraged to verify the authenticity of their devices and ensure compliance with the new regulations to avoid potential service interruptions. The Telephony app serves as a tool for both registration and verification, promoting transparency and consumer protection in the Egyptian mobile phone market.
The imposition of this substantial tax is expected to lead to an increase in the retail prices of imported mobile phones. Retailers are likely to pass on the additional costs to consumers, potentially leading to a decrease in demand for foreign brands. This scenario creates an opportunity for local manufacturers to expand their market share. Companies like Sico Technology, known for producing Egypt’s first locally assembled smartphone, may experience increased demand as consumers seek more affordable alternatives. This shift could invigorate the domestic mobile phone industry, leading to job creation and technological advancements.
However, the market may face short-term disruptions. Importers and retailers of foreign brands might experience reduced competitiveness due to higher costs, potentially leading to a reevaluation of their market strategies. Additionally, the enforcement of the tax through the newly introduced Telephony app aims to reduce the circulation of counterfeit and unregistered devices, thereby improving overall market standards.
For consumers, the immediate effect is the anticipated rise in prices of imported mobile phones. This increase may prompt a shift towards locally manufactured devices, which are exempt from the new tax. Consumers might also explore the second-hand market as a cost-effective alternative. To comply with the new regulations, individuals bringing phones into Egypt are required to register their devices using the Telephony app within 90 days of arrival to avoid service disruptions. This process involves inputting the device’s International Mobile Equipment Identity (IMEI) number and paying the calculated customs fees online. Failure to comply will result in the device being blocked from Egyptian networks.
The government’s initiative is designed to combat the significant issue of mobile phone smuggling, which officials estimate accounts for 95% of devices entering Egypt. By enforcing this tax and registration system, the government aims to create a level playing field for local manufacturers and ensure fair competition within the mobile phone market. Additionally, the policy is expected to increase government revenues through the collection of customs duties, which can be reinvested into the economy.
