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updated: 3/26/2013 8:43 AM

Egypt raises customs on luxury imports

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Associated Press

CAIRO -- Egypt's Islamist President Mohammed Morsi hiked customs rates on dozens of "non-essential" imports as part of the government's efforts to increase revenues to revive the ailing economy.

Morsi's decree issued late Sunday raises tariffs on a wide range of luxury goods including shrimp, gambling tables, sunglasses, nuts, and fireworks.

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Egypt's economy has been hit hard by the instability that followed the 2011 uprising that forced longtime autocratic ruler Hosni Mubarak from power, particularly the vital tourism sector.

The government is currently engaged in talks with the International Monetary Fund to secure a $4.8 billion loan, which would help attract other international lenders and reassure foreign investors.

The conditions for the loan have not been made public, but Morsi's government has been pushing an austerity plan that would cut subsidies and raise taxes to shrink the budget deficit from its current level of almost 11 percent. His government had initially aimed at 8.5 percent but is now suggesting it could be 9.5 percent.

Talks with the IMF were delayed in December when violent protests erupted and the president was forced to rescind his austerity plan. Some in the opposition and the business community have called for a national dialogue on the proposals to win public consent before any austerity measures are introduced.

Egypt had long been viewed as a stable corner of the Middle East. Reserves stood at around $36 billion just before Mubarak was toppled.

The past two years of political upheaval, however, have kept investors from returning and have curtailed tourism, a foreign currency earner. Foreign currency reserves were slashed by more than two-thirds following the uprising, dipping to a critical level of $13.5 billion this year.

One way Egypt is seeking funds is through the return of millions of dollars earned under rampant corruption during Mubarak's nearly three decade-long rule. Members of the Muslim Brotherhood group, from which the president hails, have spoken out in support of striking deals with former regime figures.

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