The 2021 tax hikes are back: A raft of tax, duty and development fee hikes that have been on the legislative agenda for 18 months were given the OK by the House Planning and Budgeting Committee yesterday after the government amended some of the changes, according to Al Shorouk.

Refresher: The tax hikes have been in limbo since December 2021 when the Madbouly government pulled it from the House following its rejection by the House General Assembly.

OFF THE TABLE-

The amended legislation has scrapped provisions that would have impacted people on lower incomes: The proposed 2% development fee on finished durable goods and the 5% fee on local and imported soft drinks have both been removed in the new bill.

STILL IN PLAY-

The fun tax is staying: Entry to theaters, parks, clubs, sports events, and other entertainment venues will be subject to a 5-20% tax.

And duty-free is still in for a duty-not-free rebrand: Purchases from duty-free shops will now be subject to a 3% tax, while a 10% charge will be applied to purchases of alcohol of more than 1 litre.

Expect higher stamp tax on ins.: The amendments also raise the stamp tax on most ins. premiums to 1% and double the existing EGP 50 exit tax to EGP 100.

Luxury goods are getting more expensive:The more “luxurious” imported goods are getting hit with a development fee equivalent to 10% of their custom fee: that includes salmon, shrimps, caviar, chocolate, electric shavers, headphones, watches, certain kids toys, and blue cheese.

** You can read up on the details of some of these measures in our initial coverage of the story.

The state is in need of additional revenues: Rising commodity prices, higher interest rates and additional borrowing this year means the government is now expecting the budget deficit to widen to 8.0% by the end of June from 6.1% in FY 2021-2022. The draft budget forecasts revenues to rise 41% to EGP 2.14 tn in the coming fiscal year thanks to higher tax receipts. It isn’t clear whether this new package of tax hikes were factored into the equation.

Entertainment and stamp tax to add EGP 10 bn to the public purse:The entertainment tax is expected to generate some EGP 5 bn in revenues a year, which will go towards the state’s EGP 529.7 bn subsidy bill for the coming fiscal year, committee deputy chairman Yasser Omar told reporters yesterday. Meanwhile, the stamp tax hike will bring in some EGP 5 bn, Deputy Finance Minister Ramy Youssef told MPs.

What’s next? The amendments will be passed to the House General Assembly where they will be discussed and voted on in an upcoming session. MPs will reconvene on 28 May.

ALSO FROM THE HOUSE-

Tougher penalties for harassment? The House Legislative Committee gave initial approval to draft amendments to the penal code that would introduce harsher penalties for harassment and assault, especially in the workplace and public transportation, according to Al Shorouk. One MP highlighted the need for regulatory amendments to protect witnesses and those who come forward about harassment cases.

What’s next? The committee will continue discussing the amendments at a later session before granting them final approval and forwarding them to the general assembly.

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