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Tax hikes clear first hurdle in the House: MPs yesterday gave preliminary approval to a raft of tax, duty and development fee hikes, 18 months after rejecting the government’s initial plans to raise tax revenues. The changes include a new 5-20% tax on entry to entertainment venues, new fees on purchases of duty-free projects, and a 10% fee on certain luxury goods. We covered the key details of the bills last week when the House Planning and Budgeting Committee gave it approval.
Remember: The government has watered down its proposals after the House rejected them back in 2021. The original bills would have imposed a 2% development fee on finished durable goods and a 5% fee on soft drinks.
What’s next: The House is set to give its final approval to the amendments in an upcoming session.
Not everyone is onboard: Five leftist and liberal MPs rejected the bills and criticized the plans for imposing new financial burdens on the public. “This government is targeting the pockets of citizens in any way and I think by doing so it has gone mad,” Social Democratic Party member Farid El Biadia said. “These tax and fee hikes go in conflict with recent government measures to create a more investment-friendly climate,” leftist National Progressive Unionist Party spokesman Atef Meghawry said. Meanwhile, Justice Party spokesman Abdel Moneim Imam said that the state continues to target citizens to fill its budget deficit while continuing to spend “extravagantly on needless projects such as building bridges.”
Maait responds: Raising taxes is better than increasing foreign borrowing and is necessary to pay for the increased spend on social safety programs, Finance Minister Mohamed Maait told MPs. Fakhry El Fiqi, who chairs the House Planning and Budgeting Committee, emphasized the importance of finding new revenue streams to pay for the higher welfare payments. “These new tax and fee hike bills are necessary to generate the financial resources necessary to spend on social safety programs like the Takaful and Karama initiative which needs EGP 6 bn to increase the number of families benefiting,” he said.
ALSO FROM THE HOUSE- MPs approved a decision allowing Egypt to join the 2006 MaritimeLabour Convention, joining over 100 countries that have ratified the convention. The convention aims to establish “minimum working and living standards for all seafarers working on ships flying the flags of ratifying countries.”
