Egyptian president instructs government to prepare bundle of financial measures to face global economic downturn

CAIRO – 21 March 2022: While checking the FY2022/2023 draft budget, President Abdel Fatah al-Sisi instructed the government to immediately prepare a bundle of financial and social protection measures that would alleviate the impact of global economic repercussions on Egyptian citizens.

The president convened Sunday with Prime Minister Mostafa Madbouli; Minister of Finance Mohamed Mait; Minister of Social Solidarity Nevine al-Qabaj; Chairman of the National Authority for Social Insurance Gamal Awad; Deputy Finance Minister for Fiscal Policies Ahmed Kojek; and Deputy Finance Minister for the National Treasury Ehab Abou al-Eish.  

The presidency press statement indicated that the draft budget presented by the minister of finance shows a decline in total deficit by 6.3 percent of the GDP. The primary surplus continues to be 1.5 percent of GDP, while the debt-to-GDP ratio dropped to 80.5 percent. As for the growth in revenues, it rises to 17 percent to become almost LE447 billion. However, expenditure also increases by 16 percent to surpass LE2 trillion. That figure includes LE365 billion for public investments, LE400 billion for the wages of public employees, and LE323 billion for subsidies.

The president also was briefed on the developments of tax reforms, precisely the electronic invoice system, the automation of tax measures, the executive status of combating tax evasion through inspection, and the new electronic tax unit that has recently detected 5,000 cases worth LE5.5 billion.  

The number of businesses registered on the electronic tax system has grown by 106 percent since June 2018. That is in addition to the increase in the number of those who submitted tax filings electronically by over 60 percent during the same period. In a similar context, the amount of VAT collected rose by 22 percent compared to last year.

The president also checked the draft amendments to the income tax bill. The most significant of which is exempting investment funds, and the investments of the stocks market from taxes. Yet, they would be subject to flat-rate income tax on return on equity (ROE). That is to inhibit double taxation, and encourage institutional investment and support startups.

Other measures include implementing the conflict-resolution law on a larger scale, and giving individuals incentives to request electronic receipts and invoices, while mandating the business community to provide electronic invoice starting 2023.

Further, the simple tax return will be added to the income tax bill. That type of tax filing can be carried out by all businesses without being required to register themselves at the Micro, Small, and Medium Enterprise Development Agency (MSMEDA).  

The officials also presented the strategic dimensions of the custom system development strategy as well as the most prominent programs and initiatives in that realm. One of those is that importers will be mandated to abide by international standards starting March.

Finally, participants in the meeting displayed the executive status of the pre-registration of cargo so as 30,000 importers used it. As for the number of pre-registration requests rejected because of non-compliance with import laws, rules, and regulations, it is 2,000.