Making good on reforms to draw investment: The Madbouly cabinet approved several draft bills and amendments aimed at making the business environment more attractive to private-sector investors in its weekly meeting yesterday, according to a cabinet statement. The moves include eliminating tax exemptions granted to some state entities in a bid to level the playing field between state and private entities, extending incentives granted to private projects, and streamlining dispute resolution in economic and district courts.

We knew this was coming: The measures approved by cabinet were among 22 moves to reform the business climate put forward by the Supreme Investment Council (SIC) in its first ever meeting back in May. The SIC was established to replace the investment council formed in 2016 as part of the state’s efforts to boost investment and stimulate economic growth.

#1- The end of preferential tax treatment for state entities: The Madbouly cabinet has approved a draft law eliminating tax exemptions for many state-owned entities in a bid to “improve the investment climate, support private-sector participation,” and promote fairness, competitiveness, and transparency in the economy, it said.

Some projects will remain tax exempt: The move to eliminate tax exemptions won’t apply to projects that fall under international agreements, projects that fall under defense and national security, and basic infrastructure projects, the statement reads.

#2- Expanding investment incentives: Cabinet also approved amendments that expand incentives laid out in the Investment Law. They include newly allowing projects that predate the 2017 law to benefit from its incentives. A wider variety of projects will also be able to apply for a fast-track license (a ‘golden’ license), and more projects will be eligible to establish themselves in freezones. Cabinet also approved amendments that add “special incentives aimed at attracting specific industries and directing them to specific regions within the country,” the statement read, without elaborating.

#3- Faster dispute resolution: Cabinet approved amendments to two laws meant to improve contract enforceability by expanding the jurisdiction of economic and district courts to resolve commercial disputes. Under the draft amendments, economic courts will be able to take on and settle final appeals for higher-value cases than is currently allowed, speeding up the dispute resolution process.

What’s next: All the measures still need to go through parliament before being ratified by President Abdel Fattah El Sisi.

PLUS- An Egypt-Brazil double taxation treaty on aviation: Cabinet also approved a draft decision to prevent double taxation on earnings generated from Egypt-Brazil air transport, the statement added.

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