Egypt and Côte d’Ivoire have begun rolling back key tax exemptions in early 2026, signalling a shift away from fiscal relief toward tighter revenue mobilisation as rising debt servicing costs squeeze public finances.
Both measures affect politically sensitive sectors: consumer electronics in Egypt and fertiliser inputs in Côte d’Ivoire— amid a broader recalibration across Africa.
Egypt’s custom authorities and the National Telecommunications Regulatory Authority (NTRA) said on Tuesday that duties on foreign mobile phones brought in by travellers would be reinstated from January 21, ending a temporary exemption introduced in January 2025.
The exemption had allowed travellers to use foreign-purchased phones with local SIM cards indefinitely without paying customs duties, provided the devices were declared on arrival.
Under the new framework, Egyptians living abroad will receive a 90-day exemption for personal devices during each visit. To qualify, they must submit passport details, entry stamps and proof of residence abroad through dedicated government channels.
Tourists may continue to use foreign SIM cards without paying duties. Those who want local connectivity must purchase a special “tourist SIM” from telecom operators, which also carries a 90-day exemption.
Authorities said the original tax break had been designed as a temporary measure until domestic manufacturing recovered.
“The local industrial context has changed and the exemption is no longer necessary,” officials said, noting that 15 international manufacturers now operate in Egypt, producing more than 20 million devices annually.
Officials said the new system would improve tax compliance, reduce smuggling and allow authorities to better monitor devices connected to domestic networks.
Côte d’Ivoire introduces VAT on fertiliser inputs
Côte d’Ivoire has taken a similar path, introducing a 9% value-added tax on fertiliser production inputs and packaging materials under its 2026 budget law, which took effect on January 17.
The products had been fully exempt from VAT until 2025, but the 2026 tax annex ended the break.
While the initial proposal applied the standard 18% rate, the government opted for a reduced 9% levy to limit the shock to producers and farmers.
Côte d’Ivoire does not produce mineral fertilisers domestically. Instead, firms import raw inputs and blend them locally into NPK compound fertilisers. Key operators include SOLEVO and ETG.
According to data from the International Fertilizer Development Center (IFDC), the country imported 573,123 tonnes of fertiliser in 2024. Urea accounted for 32% of volumes, followed by potassium chloride at 24% and NPK at 14%.
Most imports are straight fertilisers used as inputs for domestic blending, meaning the new VAT directly raises production costs.
Economists warn that higher input costs could be passed on to farmers, potentially slowing fertiliser use.
Debt pressures drive fiscal shift
In both African economies, the withdrawal of tax relief coincided with rising debt obligations.
Egypt’s total sovereign debt climbed $161.2 billion by September 2025 from $156.7 billion by March, raising the debt-to-GDP above 45%, according to the country’s statistics bureau.
The International Monetary Fund (IMF) says Egypt’s external financing needs will rise over the next two fiscal years before easing, reflecting regional instability and tighter global financial conditions.
With the government targeting annual external debt reductions of $1–2 billion, a growing share of domestic revenue is being absorbed by debt service.
In Côte d’Ivoire, debt servicing reached CFA861 billion, equivalent to roughly $1.5 billion, in the first half of 2025, equivalent to 24.4% of tax revenue and 10.4% of total public resources, the ministry of finance released earlier in the year.
External debt accounted for over 60% of that burden. The IMF projects public debt at 58.1% of GDP in 2025, keeping the country in the “moderate risk” category.
After years of using tax exemptions to support consumption and attract investment, governments are now reasserting revenue discipline as debt costs rise and access to global financing conditions tightens.
For businesses and households, the shift means higher effective tax burdens as policymakers return to a more aggressive revenue mobilisation push.
