{"id":572697,"date":"2020-07-06T03:57:31","date_gmt":"2020-07-06T03:57:31","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/2020\/07\/06\/house-gives-initial-nod-to-covid-19-salary-tax-aims-to-have-it-in-effect-this-month\/"},"modified":"2020-07-06T03:57:31","modified_gmt":"2020-07-06T03:57:31","slug":"house-gives-initial-nod-to-covid-19-salary-tax-aims-to-have-it-in-effect-this-month","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/egypt\/2020\/07\/06\/house-gives-initial-nod-to-covid-19-salary-tax-aims-to-have-it-in-effect-this-month\/","title":{"rendered":"House gives initial nod to covid-19 salary tax, aims to have it in effect this month"},"content":{"rendered":"

<\/a> LEGISLATION WATCH- House gives initial nod to covid-19 salary tax, aims to have it in effect this month: <\/strong>The House of Representatives has given a preliminary nod to a law that will require companies to deduct 1% from all employees\u2019 monthly salaries and 0.5% from all pensions during FY2020-2021 to help fund the state\u2019s efforts to contain the economic fallout from covid-19, Al Masry Al Youm<\/a> reports. Announced in May<\/a>, the temporary, 12-month tax<\/strong> is being put in place by the government to shore up public finances that have been hit by the pandemic and fund its emergency fiscal measures to prop up the economy, which include a EGP 100 bn stimulus package<\/a>.<\/p>\n

State coffers could take in as much as EGP 8-10 bn <\/strong>from the levy, Finance Minister Mohamed Maait has reportedly said.<\/p>\n

All public and private-sector employees will see 1% docked from their salaries as of this month<\/strong> and pensioners will be charged a 0.5% tax on their state pensions. The only people exempt from the charge are those earning a salary or receiving a pension of less than 2k a month or individuals or employees of companies that receive a special dispensation from the cabinet.<\/p>\n

Cabinet has wide discretion over the use of the funds<\/strong>, which are to be placed in a special \u201cepidemics and natural disasters\u201d account at the CBE. Funds will be dispensed to support the economy, provide subsidies to impacted workers, offer financial aid to individuals and families specified by the president, develop and maintain the healthcare system, conduct research for preventative and curative care, alongside any other allocations determined by the cabinet.<\/p>\n

House approves law to waive late fees on taxes:<\/strong> The House of Representatives has given preliminary approval to a bill that waives interest and late penalties on income, value-added and real estate taxes<\/a>, according to Al Shorouk<\/a>. The bill waives 90% of the fees if the taxes are paid within two months after it becomes law, 70% if paid within four months, and 50% within six months. Late taxpayers that were able to clear their dues before the temporary law passed received a 100% exemption, cabinet said in May<\/a>.<\/p>\n

Amendments to the Public Contracts Act also go preliminary approval yesterday <\/strong>as the House approved in principle changes that would allow the government to make payments it owes to contractors through FRA-licensed non-banking financial service providers, alongside the existing option of paying through banks, Al Shorouk<\/a> also reported. The changes were approved by the cabinet earlier this year<\/a>.<\/p>\n

Background: <\/strong>The Public Contracts Act (previously known as Auctions and Tenders Act) was passed in 2018<\/a>, and had its executive regulations published<\/a> late last year. The act outlines the general framework which governs any contract to which a government entity is party. You can find the full text of the 2018 law here<\/a>.<\/p>\n

Also receiving preliminary approval by the House during Sunday\u2019s session:<\/p>\n