[News] Tax Policy Strategy 2024/2030 to be submitted to Egypt’s National Dialogue next week

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The Ministry of Finance will submit a Tax Policy Strategy for Egypt 2024/2030 document to the National Dialogue next week, Minister of Finance Mohamed Maait said in a statement on Monday.

Maait noted that this strategy does not include any new burdens on investors, any increase in tax rates, or adjustments in the tax brackets, adding that the new income tax law will be an incentive for economic sectors. Under the directives of President Abdel-Fattah El-Sisi, the second round of the National Dialogue will kick off Sunday, with a focus on the serious economic issues that Egypt is experiencing. New amendment for General Finance Law The cabinet has approved the amendment of certain provisions of the Unified General Finance Law and referred it to the House of Representatives for discussion next week, the minister stated. This amendment introduces what is called the "general government budget," to achieve the budget comprehensiveness principle, according to Maait. The general government budget includes the general state budget and the budgets of 59 economic entities in terms of revenues and expenditures, he explained. “This will be implemented gradually over five years, starting with the presentation of the general government budget during the upcoming FY2024/2025, including the general state budget and the budgets of 40 economic entities, after the approval of the House of Representatives,” said Maait. Moreover, he added that for the first time, after the issuance of this legislative amendment, the government will present 61 budgets, which are the general government budget, the budgets of 59 economic entities, and the general state budget. This amendment includes a fundamental change in the general state finances that contributes to improving financial indicators, according to the minister. The revenues of the general state budget along with 59 economic entities amount to about EGP 5 trillion, while the revenues of the general state budget alone amount to EGP 2.1 trillion, which leads to unrealistic indicators. Controlling debt Maait also stated that the concerned authorities are currently setting a debt ceiling for budget agencies and economic entities, to be determined annually and not to be exceeded except after the House of Representatives’ approval. “This comes in line with the state's efforts to put the debt-to-GDP ratio on a sustainable downward path,” he said. He added that they are working on extending the average maturity of the budget agencies' debt to four years in the medium term, instead of the current three years, to reduce the need for rapid financing. In this regard, the minister noted that Egypt’s debt-to-GDP ratio decreased from 103 percent in June 2016 to about 80 percent of the GDP in June 2020. Still, it started to rise again driven by the high inflation and rising interest rates, reaching 95.7 percent in June 2023. Maait also emphasized the government's commitment to continuously update the debt strategy annually to reduce its ratio and service to the domestic product. The International Monetary Fund (IMF) concluded its mission to Egypt earlier in February, through which the two sides had reached a staff-level agreement for pushing forward the ongoing $3 billion loan deal, besides a possible additional financing package. This comes amid the severe repercussions of both the war in Gaza and in Ukraine on the Egyptian economy. Supporting exporters The government continues its supportive journey for the export sector despite all internal and external challenges, the minister said. “We are launching a new phase of the ‘Instant Cash Payment’ initiative to support exporters, with around EGP 54 billion being disbursed to exporting companies since the implementation of the initiatives to settle the outstanding exporters’ arrears in October 2019,” Maait added. The minister indicated that the General State Treasury bears the value of the tax on built properties utilized in carrying out certain industrial and productive activities, representing 21 economic sectors for 3 years until the end of 2026, amounting to EGP 1.4 billion annually. Egypt plans to raise its annual exports to global markets to $100 billion annually.

https://english.ahram.org.eg/NewsContentP/3/517994/Business/Tax-Policy-Strategy--to-be-submitted-to-Egypt’s-Na.aspx