May 24, 2018 / 12:18 PM / 5 months ago

UPDATE 1-Algeria plans 60 to 200 pct customs duties on finished products

ALGIERS, May 24 (Reuters) - Algeria plans customs duties between 60 to 200 percent on finished goods, according to an official document seen by Reuters on Thursday, creating new revenues to offset lower energy earnings.

“The list of products ... will be specified by regulation,” the government said in the document, without giving details.

Algeria has failed to cut imports despite several earlier restrictions that have raised concern from Algeria’s main trading partner, the European Union.

The government early this year banned imports of 851 goods including foodstuffs, cell phones, home appliances and some raw materials.

But the ban has had little impact, with the import bill declining just 4.8 percent to $15.22 billion in the first four months. Based on that, full-year purchases will be close to last year’s $46 billion.

The ban followed a license system adopted in the past two years that had led to similarly disappointing results.

The government had previously announced a plan to lift the import ban without saying when it would come into force.

In the latest move, an official told Reuters, authorities will set up a committee made up of ministries such as finance, industry and trade to determine the list of list of goods and the duties applied.

The measure “is part of the protection and defense of national production ... against massive imports that are detrimental to the economy,” said the document.

Some foreign suppliers, such as the European Union, have expressed concern as their market share in Algeria is dwindling. Algeria was in “permanent dialogue” with the EU, Trade Minister Said Djellab said earlier this month.

OPEC member Algeria still depends on oil and gas earnings, which have fallen 50 percent since crude oil prices started dropping in 2014. Non-energy performance has been improving slowly, but Algeria is still can’t meet domestic demand.

Analysts believe the planned customs duties will lead to higher inflation as retail prices for goods shipped from abroad go up.

“This measure will significantly hit the purchasing power of citizens,” said university economics professor Aberrahmane Aya. (Reporting by Hamid Ould Ahmed Editing by Ulf Laessing, Larry King)

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