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.

Azerbaijan eyes to open two more DOST Centers till late 2020
Azerbaijan eyes to open two more DOST Centers till late 2020
More Kazakh citizens sent back home from Azerbaijan by sea
More Kazakh citizens sent back home from Azerbaijan by sea
“Protect the Caspian Sea” with support of Bakcell and its partners (PHOTO)
“Protect the Caspian Sea” with support of Bakcell and its partners (PHOTO)
Loading Bars
White House urges Congress to pass separate aid bill for airlines
UN chief appeals for global solidarity at UN General Assembly
UK records highest daily rise in new coronavirus cases since early May
Kazakhstan's ministry talks influence of quarantine regime on atmospheric background
Turkey reports 1,692 new COVID-19 cases
UK PM Johnson wins over rebels on Brexit treaty-busting powers
Gold reserves reduced in Uzbekistan
Volodymyr Zelensky makes phone call to President Ilham Aliyev
Tamar Gabunia: No new decision has been made regarding school resumption
France's Macron says U.S. maximum pressure on Iran not working
Israeli PM, Bahraini crown prince discuss cooperation over phone
Audit services in Azerbaijan improving step by step
Mayor urges holidaymakers to 'stay permanently' amid population boom in Bodrum
Iran purchases additional wheat from farmers
Turkish president makes phone call to Azerbaijani president
President of Uzbekistan to deliver speech at 75th UN GA session
28 Kazakhstanis died from COVID-19 on Sep 14-20
Valentina Matviyenko: Azerbaijan has been and remains strategic partner for Russia
U.S. COVID-19 deaths top 200,000 -- Johns Hopkins University
MP: Azerbaijan to give worthy response to any provocations of Armenia
Azerbaijani finance ministry’s securities in great demand
Cargo transportation volume through "Middle Corridor" by late 2020 disclosed
China's exports of flat-rolled products of non-alloy steel to Georgia down
Georgian expert: Azerbaijan harmoniously combines three world religions
Geostat reveals volume of Russian export to Georgia
Speaker of Azerbaijani parliament meets chairperson of Federation Council of Russian Federal Assembly (PHOTO)
Georgia reveals volume of processed grapes by regions
Georgia reveals export statistics of major goods to Russia
Israeli city vice-mayor: Azerbaijan highly appreciates tolerance
Baku Port: New transport corridors of Caspian Sea increases Middle Corridor's role
Iranian Energy Exchange announces products to be on sale September 23
French Development Agency to fund construction of Uzbek hydropower plants
Review of Georgian exports to China
Red Cross representatives visit Dilgam Asgarov, Shahbaz Guliyev
Turkish president: Armenia - biggest obstacle to peace in South Caucasus
Kazakhstan to greatly increase level of automation of public services
Azerbaijan's AzInTelecom supports creation of new mobile app
Purchase of wheat in Iran's Sistan and Baluchestan Province completed
Uzbekistan permits flights for Abu Dhabi low-cost airline
Georgian company AgroKartli expect to increase apple crop
New ambassador of Netherlands to Azerbaijan arrives in Baku
Azerbaijan eyes to open two more DOST Centers till late 2020
Azerbaijan's ADY Express reveals cargo handling volumes via BTK railway
Georgian Railway sees increase in cargo transportation
Germany increases export volumes to Kazakhstan despite COVID-19
Industrial production to be increased in Uzbek regions
Uzbekistan boosts import of grain, legumes from Turkey
Azerbaijani First VP Mehriban Aliyeva attends opening of new kindergarten (PHOTO)
ADIF discloses amount of сompensations made to clients of closed banks
Kazakhstan Air Astana to resume direct flights to Russia
IRI's International Assessment Team Arrives Ahead of Georgia’s Parliamentary Elections
Iran’s NISOC can increase extraction coefficient
Kazakhstan's progress on cereals and legumes harvesting revealed as of Sept.22
Bahar Azadi gold coin price climbs
Azercosmos begins cooperation with ViewMedia
National Bank of Georgia to sell funds at foreign exchange auction
COVID-19 pandemic negatively affects Georgian Sarajishvili's company
Ceramic plant being prepared to launch in Turkmenistan’s Lebap region
Iran Customs Administration to facilitate release of imported goods
Azerbaijan to upgrade local hydrological networks
Construction of new apartments across Iran's towns going full speed
Int'l community must stop terror carried out by Armenia against Azerbaijan - Lebanese lawyer
Review of Georgian livestock export to Azerbaijan
More Kazakh citizens sent back home from Azerbaijan by sea
Azerbaijani First VP Mehriban Aliyeva attends opening of new building of Children’s Art School in Bulbula settlement (PHOTO)
Georgia plans to create low-cost airline
Volume of cotton fiber exports from Azerbaijan revealed
Turkmengas to purchase chemical products via tender
Iran discloses number of small mines restored
Uzbekistan considers joining research of vaccine for COVID-19
Iran increases amount of foreign currency assigned to importers
Siemens sees market value of energy spin-off above $20 billion
Produce in Georgia agency to begin accepting applications for its Micro and Small Business Support Program
Uzbekistan increases electric cars import
Iran’s Khouzestan Steel Company reaches new production level record
“Protect the Caspian Sea” with support of Bakcell and its partners (PHOTO)
Updates on Uzbekistan’s nuclear progress
EY Azerbaijan officially announces the start of the ‘EY Entrepreneur Of The Year™’ 2020-2021 competition
Subsidiary of KazMunayGas to buy diesel fuel via tender
Cement imports by US from Turkey slightly up amid COVID-19 pandemic
IMF: Economic growth in Uzbekistan to be positive due to growth in construction sector
Azerbaijan's CBA discloses amount of foreign currency bought by local banks
Russia lowers import of Turkish clothes
Geostat reveals volume of citrus fruits exported by Georgia to Azerbaijan
Romanian WEVO company implementing state projects in Azerbaijan (PHOTO)
WTL ready to implement new project in Turkmenistan
Review of Georgian corn export to Azerbaijan
Azerbaijan has right to liberate its lands by military means - Turkish general
Azerbaijan confirms 113 more COVID-19 recoveries
Value of exports from Iran's Maragheh County revealed
Georgian corn oil to enter local market
ROMGAZ moves towards becoming active player on natural gas distribution market
Azerbaijan's Energy Ministry reveals data on gas production, export
Iran reveals its COVID-19 data for September 22
Youth Union of New Azerbaijan Party issues appeal regarding Armenian provocation
PACE rapporteurs welcome decision to release Tofig Yagublu to house arrest
Oil rises on expectations demand can survive new lockdowns
Azerbaijan reveals oil production, export figures for ACG, Shah Deniz field
Electricity potential of Iran's thermal power plants up
Demand for Turkish electrical goods in China down
All news