Gov’t readies new social protection package: The Madbouly government’s new social protection package that Prime Minister Moustafa Madbouly teased at his most recent weekly presser will contain raises in the minimum wage, tax thresholds, social protection coverage, and pensions, two government sources told EnterpriseAM. The package is expected to be approved by March or after receiving directives from the presidency, our sources said. Here’s what we expect the package to include:

#1- Another round of wage hikes: The government is planning on raising the minimum wage for civil servants and workers at state-owned enterprises. While the size of the increase has not yet been decided on, our sources anticipate the government to opt to raise the minimum wage by EGP 1k to EGP 7k, with adjustments for other income brackets.

Remember: The government last increased the public sector minimum wage early last year, raising it by 50% to EGP 6k as part of a wider EGP 180 bn social support package. The private sector minimum wage also rose 71% to EGP 6k last year, bringing it in line with the public sector

#2- Raising the income tax exemption threshold: The Finance Ministry is looking into raising the personal income tax exemption threshold to EGP 65k — up from EGP 60k previously — while keeping other income brackets unchanged, our sources said.

#3- Expanding Takaful and Karama: The government intends to increase the number of beneficiaries of the Takaful and Karama social safety program. The government is expected to add between 300k-500k families to the program, prioritizing those most vulnerable.

#4- Larger pensions: The package will also include a 15% pension increase for 13 mn pensioners.

The final price tag? It remains undecided how much the package will set back the Madbouly government, but the figure is being studied and will soon be presented by the Finance Ministry to the cabinet.

Déjà vu? Last year also kicked off with a big support package that included wage hikes, pension increases, and tax breaks to alleviate the effects of the economic crisis on citizens.

ALSO COMING SOON- The move away from subsidies and to direct cash-based assistance is also fast approaching, with the government looking to gradually start implementing the change starting from the next fiscal year starting with four governorates before applying it nationwide. The move is awaiting the National Dialogue’s proposals and the necessary data from the Supply Ministry that will help authorities decide on the amount of cash support to be disbursed, the sources told us.

Want the full story? We dove into everything you need to know about the move to cash-based subsidies in a story published last September.

Tags: