Egypt's govt proposes subsidies cuts, tax increases to slash deficit

Egypt's govt proposes subsidies cuts, tax increases to slash deficit

In order to reduce Egypt's growing budget deficit, the government has proposed a package of reforms that includes raising taxes and cutting subsidies Al Ahramonline reported.

The reforms will be included in a modified economic programme that Egypt will present on Tuesday to the IMF, with the aim of meeting the pre-conditions for a proposed $4.8 billion loan to Egypt.

The proposed modifications should, according to Hani Qadri Demyan, assistant to Egypt's minister of finance, reduce expenditures by between LE10-12 billion ($.1.8 billion) in 2013/2014.

At a conference held at the ministry of finance on Tuesday, Demyan said that savings from the current fiscal period will not be very high, as the reforms will not be adopted before March or April.

The implementation of the proposed reforms will not start until they are approved by the Shura Council, which will start debating them within two days, according to Demyan.

The reforms approved by Egypt's cabinet are a milder version of a set of policies proposed by Morsi in December, which he then suspended amid growing popular anger.
The cabinet has approved an increase in tax sales for six goods instead of the 25 proposed previously. The concerned goods are beverages, cigarettes, steel, cement and telecommunications.

"Fertilisers, oils and wood will not be affected, to make it easier for citizens, especially those with limited revenues," reads a document released by the cabinet, referring to the law unilaterally issued by Mohamed Morsi, last December.

The fiscal reforms also include an increase in the maximum revenue tax from 20 to 25 percent, as well as an increase in the minimum monthly salary eligible for income tax exemptions from LE9,000 to LE12,000 as of October 2013.

The tax brackets in between will be also modified.

Another aspect of the government programme is a cut in energy subsidies, which are estimated to reach LE117 billion this fiscal year.

Energy prices for energy intensive industries will be gradually raised to reach production costs in three years.

"It was clearly announced that food industries will not be concerned because of their social aspect," Qadri commented.

The fate of other industries is not clear yet. The government, however, increased energy prices in April last year for energy-intensive industries from $4 to $6 per million British Thermal Units (BTU) and from $2.25 to $3 for medium energy-intensive industries.

The government also intends to ration subsidised fuel through a system of smart cards, allowing drivers a limited amount of fuel.

Demyan described energy subsidies as the main article that can make big savings, as three quarters of state expenditures are divided between subsidies, debt service and salaries.

At the press conference, Minister of Finance El-Mursi El-Sayed Hegazy saluted an initiative made by Egypt's former prime minister Ali Lotfi calling on the rich to pay back to the state their share of annual subsidies, which he calculated at LE16,000 per person.

Egypt's deficit is estimated to reach between LE180-190 billion, or between 10.7-11 percent of GDP this year.

"The proposed fiscal reforms should help to cut the deficit to 9.5 percent of GDP in 2013/2014, otherwise it will explode," said Demyan.

Subscribe to Trend in Google News! Subscribe
Volume of investments in construction of bp's power plant in liberated Azerbaijani lands revealed
Volume of investments in construction of bp's power plant in liberated Azerbaijani lands revealed
Transport infrastructure in Karabakh to turn Azerbaijan into logistics hub between Central Asia and Europe – CAERC
Transport infrastructure in Karabakh to turn Azerbaijan into logistics hub between Central Asia and Europe – CAERC
ADB funding bridge construction in Georgia
ADB funding bridge construction in Georgia
Loading Bars
Latest
Arab Coalition destroys 14 vehicles, kills more than 115 Houthis
Iran’s Bahar Azadi gold coin price continues to rise
Kyrgyz Cabinet aims to increase share of electric vehicles in country
Azerbaijan shares data on number of vaccinated citizens
Azerbaijan confirms 1,394 more COVID-19 cases, 1,791 recoveries
Kazakhstan increases petroleum oil exports to France
Volume of cargo loaded/unloaded in Iran’s Bandar Lengeh port decreases
Iran boosts aluminum ingots production
COVID-19: 11 areas of Kazakhstan in ‘green zone’
Cargo train services launch between Georgia, China
Iran reveals COVID-19 data for December 5
Turkey, Italy work together for regional peace, stability: FM
Tripartite deal to solve main part of Iran’s gas problem - Chief of Staff of Iranian President
Oil production on Turkmen Cheleken peninsula exceeds planned volume
State Customs Committee discloses TOP-5 trade partners of Azerbaijan
State Customs Committee reveals trade turnover between Azerbaijan and China
Azerbaijani Defense Ministry presents weekly review (VIDEO)
Georgia reports 3,410 coronavirus cases, 4,732 recoveries, 46 deaths
At least 14 civilians mistakenly killed by Indian forces in remote northeast
Iranian currency rates for December 5
Kyrgyzstan confirms 42 new COVID-19 cases
New Year budget to depend on activities’ scale - Tbilisi Mayor
Iran’s SPGC shares data on production of its fifth refinery
Baku International Sea Trade Port unveils cargo transshipment for 10M2021
Pakistan receives $3 billion loan from Saudi Arabia
VISA open to co-op with all key players in Azerbaijan’s transport sector (Exclusive)
6.1-magnitude earthquake rattles southern Philippines
Soyuz-ST-B with 2 Galileo satellites launched from Kourou spaceport
Dutch former queen Beatrix tests positive for COVID-19
10 mln French have received COVID-19 booster shots: minister
Iran abandoned any compromises in latest nuclear talks - U.S.
Chile reports first case of Omicron variant
White House confirms plans of holding video call between Biden and Putin on December 7
Vienna talks on Iran nuclear deal to resume next week - Russian Foreign Ministry
1 killed, 40 injured following volcanic eruption in Indonesia
Body of another Armenian serviceman found in Azerbaijan's Khojavand
Bitcoin tumbles 9.95% to $48,397.56
Passenger transportation via Iran's Kermanshah International Airport declines
UK records another 42,848 coronavirus cases
Explosion occurred near Iran's nuclear facility
Azerbaijan hands over to Armenia body of saboteur neutralized in attack on Azerbaijani serviceman in Khojavand
Azerbaijan talks entreprises to be commissioned at Aghdam Industrial Park
Major terrorist attack against rally with Erdogan's participation prevented in Turkey
Great number of EU, NATO countries interested in Turkish drones - Cavushoglu
Georgian PM meets with President of FIBA Europe
OSCE MG ready to host meeting between Azerbaijani and Armenian FMs
Value of Azerbaijan's export to US surges for 10M2021
Prices on several main food products in Kazakhstan continue to lower
Agrarian sector of ‘smart village’ in Azerbaijan’s Zangilan to be combined modern urban planning – minister
Azerbaijan discloses project cost of agropark in Yevlakh (PHOTO)
Buy/sell operations at Iran Mercantile Exchange down
Saudi Arabia, France agree to strengthen cooperation
Biden, Putin to hold video call on Tuesday
India, Australia are natural economic partners, says Tony Abbott
Azerbaijan receives mine maps of its territories liberated from Armenian occupation
Erdogan discusses humanitarian aid with Red Crescent, Red Cross
Uzbekistan intends to increase dried fruit exports to China
No Omicron strain detected in Georgia - NCDC Head
Aligarh’s Areeba shoots to fame, breaks stereotypes about Muslim girls
Iran’s Bahar Azadi gold coin price skyrockets
Azerbaijan shares data on number of vaccinated citizens
Azerbaijan confirms 1,406 more COVID-19 cases, 1,787 recoveries
Tactical exercises held in Azerbaijan's commando military unit - MoD (PHOTO/VIDEO)
New composition of Supervisory Board of Azerbaijan Industrial Corporation approved
Iran reveals COVID-19 data for December 4
President Ilham Aliyev sends congratulations to heads of Thailand, Finland
France, Europeans working to open joint mission in Afghanistan - Macron
Ranking of natural gas importers from Azerbaijan
Uzbek Commodity and Raw Materials Exchange reveals volume of its transactions
SOCAR Georgia Gas announces tender on gas stations restoration
Iran eyes increase in passenger transportation via Yazd Shahid Sadooghi Airport
Azerbaijan reveals oil exports to Canada in 10M2021
Weekly review of main events in Azerbaijan's transport sector
Turkmenistan’s president approves anti-crisis program for 2022
Azerbaijan’s liberated territories have high potential for solar energy - RES agency
Weekly review of key events in Azerbaijan's ICT sector
Russian company to help automate, digitalize processes in Uzbek energy sector
Iran reaches increase in load/unload operations in Shahid Bahonar port
Top 10 Azerbaijani oil importers
MFA reveals reason why Armenia-Azerbaijan ministerial meeting didn't take place
Kazakhstan talks construction of wind power plants in Kostanay region
Azerbaijan achieves practical results to restore hydropower plants in liberated lands - agency's CEO
Azerbaijan’s metallurgical company notes increases in steel production over 9M2021
Iran also to be able to take advantage of Zangazur corridor – ex-Iranian ambassador to Azerbaijan
Russia-UAE trade turnover hits fresh all-time high surpassing $4 bln - Mishustin
Kazakhstan’s Almaty Power Plants to buy pumping, ventilation equipment via tender
Azerbaijan discloses oil exports to Ukraine over 10M2021
Azerbaijan unveils volume of oil exports to Belarus in first 10M2021
Georgian Railway shares updated report on income within 9M2021
Azerbaijan’s 10M2021 oil exports to UK revealed
Kazakhstan to timely fulfill its obligations under COP26 – PM
Azerbaijan opens investment tender to privatize Sumgayit Construction Service company
Iran finds way to supply its far north, north-east provinces with gas
Georgia releases COVID-19 data for December 4
LUKOIL Uzbekistan Operating LLC opens tender for supply of shut-off and control valves
Mikheil Saakashvili not to be treated abroad – Georgia's minister
Russia offers Azerbaijan to switch to barcoding for fruit, vegetables exports
Tripartite gas swap deal with Turkmenistan, Azerbaijan, may help Iran kill two birds with one stone
Azerbaijan Mortgage and Credit Guarantee Fund issues record amount of loans in 10M2021
Goods movement across Azerbaijani-Russian border to be accelerated
All news