MPs yesterday gave final approval to draft bills that deliver a tax cut for workers and an exceptional cost-of-living payout for pensioners and public-sector workers. The two bills will now be sent to President Abdel Fattah El Sisi to be ratified into law and will retroactively come into effect from 1 October.

#1- Tax cut: The House approved amendments to the Income Tax Act that would raise the tax exemption threshold by 25% to EGP 45k from EGP 36k. The measure was announced last month as part of a package of measures aimed at reducing the impact of soaring inflation on low earners.

The numbers: The income tax exemption threshold has risen 275% in just nine years, mirroring the minimum wage rising 233% in the same period, according to a House committee report.

#2- Cost of living allowances and pension payouts: The draft bill will amend the 2022 law to raise the exceptional cost of living allowance to EGP 600 for all state employees starting this month, double the EGP 300 paid out previously, while also doubling an exceptional grant for pensioners to EGP 600 from EGP 300.

The numbers: The wage hike is set to cost EGP 15.8 bn and the pension payout will come in at EGP 32 bn.

Tags: