{"id":658614,"date":"2025-01-14T00:00:00","date_gmt":"2025-01-14T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/2025\/01\/14\/non-tax-financial-burdens-to-be-streamlined-through-additional-income-tax\/"},"modified":"2025-01-14T00:00:00","modified_gmt":"2025-01-14T00:00:00","slug":"non-tax-financial-burdens-to-be-streamlined-through-additional-income-tax","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/egypt\/2025\/01\/14\/non-tax-financial-burdens-to-be-streamlined-through-additional-income-tax\/","title":{"rendered":"Non-tax financial burdens to be streamlined through additional income tax"},"content":{"rendered":"

Good morning, folks<\/strong>, and a happy hump day to you all. We\u2019ve got a bit of everything for you today in this morning\u2019s issue, with enough legislation, competition, M&A, manufacturing, and investment news to fill up several issues. There\u2019s a lot to cover today, so let\u2019s jump right in. <\/p>\n

PSA-<\/p>\n

WEATHER- Temperatures will continue to inch up in Cairo today<\/strong>, with a high of 24\u00b0C and a low of 13\u00b0C, according to our favorite weather app.<\/p>\n

It\u2019s a tad cooler in Alexandria<\/strong>, with a high of 22\u00b0C and a low of 10\u00b0C.<\/p>\n

It\u2019s expected to be a foggy start to the day throughout most parts of the country<\/strong>, so as always stay safe on the roads.<\/p>\n

** DID YOU KNOW that we now cover <\/strong>Saudi Arabia<\/a><\/strong> and the <\/strong>UAE<\/a><\/strong>?<\/strong><\/p>\n

** Were you forwarded this email?<\/strong> Tap or click here<\/a> to get your own copy delivered every weekday before 7am Cairo time \u2014 without charge.<\/p>\n

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WATCH THIS SPACE- <\/p>\n

<\/a> #1- The government is working to replace the numerous non-tax financial burdens and<\/strong> fees imposed by state entities with an additional income tax, <\/strong>Investment Minister Hassan Al Khatib said, according to a ministry statement<\/a>. Unifying and simplifying the often confusing world of non-tax financial burdens also comes in line with the state\u2019s directive to tax income and not revenue.<\/p>\n

The Finance Ministry, General Authority for Free Zones, and the Industrial Development<\/strong> Authority will collect the new tax<\/strong> and redistribute the fees to relevant authorities, according to El Khatib, who added that the government is planning to propose a draft bill for this new tax.<\/p>\n

Remember:<\/strong> A senior government source told EnterpriseAM last year<\/a> that a committee had been formed to look into reducing the long list of taxes, customs, and fees imposed on goods and services. The move was said to be aimed at boosting local industry, increasing exports, attracting new investments, and curbing inflation by eliminating double taxation and redundant fees that see some goods taxed at up to 45%. <\/p>\n

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#2-<\/strong> Gov\u2019t, EU talks on the next tranche of the EUR 7.4 bn package in <\/strong>April<\/strong>:<\/strong> The Madbouly government will engage in negotiations with the European Union in April over the second tranche from its EUR 5 bn package of concessional loans, International Cooperation Minister Rania Al Mashat told Asharq Business<\/a>. The second tranche \u2014 set to come in at EU 4 bn \u2014 is part of a wider EUR 7.4 bn<\/a> package from the EU announced in March. The first EUR 1 bn tranche<\/a> arrived in the state coffer at the end of last year.<\/p>\n

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<\/a> #3- Engie-led consortium aims to build a 1 GW wind project by 2028:<\/strong> A local-international consortium of France\u2019s Engie, Orascom Construction, Japan\u2019s Toyota Tsusho, and Eurus Energy is looking to build a 1 GW wind project in Egypt, with the companies aiming to finalize the project\u2019s contracts next year in order to build it by 2028, Bloomberg<\/a> quotes Engie\u2019s managing director for renewables in the Middle East and North Africa Francois Xavier Boul as saying.<\/p>\n

The consortium has been busy as of late: <\/strong>The same recently put online 306 MW of a 650<\/a><\/a>MW wind farm<\/a> in Ras Ghareb, with the entire project expected to be up and running and connected to the national grid by 3Q 2025. The project is set to be the largest operational wind farm in the region once it is fully operational and have the capacity to reduce carbon emissions by 1.3 mn tons every year and provide power to over 1 mn homes once fully complete. <\/p>\n

** Our renewables ambit<\/strong>ions \u2014 and the hurdles they face \u2014 recently caught the attention <\/strong>of the international press.<\/strong> We\u2019ve got the lowdown in our Egypt in the News section in the news well below.<\/p>\n

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#4- <\/strong>China's largest tire maker is planning to expand its Egypt operations<\/strong>, with China National Tire and Rubber Company looking to expand into passenger vehicle tire manufacturing in Egypt through its wholly-owned subsidiary Prometeon Tyre Egypt, according to a cabinet statement<\/a>. The government has made available a 180k sqm plot \u2014 located near the company\u2019s existing Ameriya factory \u2014 to establish a passenger car tire factory and agreed with the Chinese company to double its existing production capacity of heavy transport tires.<\/p>\n

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<\/a> #5- <\/strong>A new renewabl<\/strong>es target?<\/strong> The government is now planning to up renewables\u2019 contribution to the energy mix to 65% by 2040, according to comments<\/a> by Electricity Minister Mahmoud Esmat. The new figure is a five percentage point increase on the government\u2019s last announced target, which only came to light in November<\/a>. In the shorter term, the country is hoping to increase the renewables mix to 42% by 2030<\/a>.<\/p>\n

Over the next year, <\/strong>Egypt\u2019s renewable energy capacity is expected to reach 10 GW by the end of 2025<\/strong>, sourced from solar, wind, and hydropower, and integrated into the national grid, Esmat added. This will then expand to 12 GW by end of 2026 and 20 GW by end of 2029, he continued<\/p>\n

FROM THE DEBT MARKETS- <\/p>\n

The average yield on two-year fixed coupon t-bonds fell 2.03 percentage points to 23.46%<\/strong> during the Central Bank of Egypt\u2019s latest issuance that raised EGP 21.6 bn in the heavily oversubscribed issuance, according to data<\/a> from the central bank. Three-year bonds fell 0.68% percentage points to an average yield of 22.58%.<\/p>\n

IN THE HOUSE-<\/p>\n

The 540-article draft Criminal Procedures Law is once again at the top of agenda at the<\/strong> house today<\/strong>, with MPs set to discuss and vote on another 40 articles.<\/p>\n

An amendment to delay a tax on agricultural land by a year will also be put to MPs<\/strong>, with the year-long postponement starting 31 July 2024 designed to ease financial burdens on farmers and encourage them to up production.<\/p>\n

Lawmakers will discuss greenlighting the Finance Ministry to guarantee EgyptAlum\u2019s<\/strong> financial commitments for a power purchasing agreement with Scatec<\/strong>, that will see the state-owned entity buy energy from the Norwegian renewables player\u2019s 1 GW solar power plant in the works.<\/p>\n

A EUR 135 mn grant from the European Investment Bank to fund the Environment<\/strong> Ministry\u2019s Sustainable Green Industry project will also be voted on<\/strong>, which will support the greening of the country industrial sector by implementing climate change and environmental sustainability measures.<\/p>\n

<\/a> MPs also discussed and passed 142 articles of the draft Criminal Procedures Law<\/strong> yesterday<\/strong>, including a controversial legislation on pretrial detention. Under the articles, the accused can be held in pretrial detention for four months for misdemeanors, 12 months for felonies, and 18 months for crimes that could lead to life imprisonment or the death penalty. <\/p>\n

Proponents of the legislation point to the new safeguards against the extension of <\/strong>pretrial detention<\/strong>, but the legislation does not explicitly prevent individuals being successively put in pretrial detention for new accusations.<\/p>\n

A presidential decree to expand the proposed Russian industrial zone in the Suez Canal <\/strong>Economic Zone also got lawmakers\u2019 approval<\/strong>, with the planned area now to stretch 500k sqm. The decree also lets Russian projects in the zone sell up to 100% of output in the local market and provides safeguards that any infrastructure or buildings won\u2019t be nationalized or confiscated at a later date.<\/p>\n

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THE BIG STORY ABROAD- <\/p>\n

Gaza ceasefire breakthrough?<\/strong> Israel-Hamas ceasefire talks in Doha are nearing fruition, officials involved with the talks say, with US President Joe Biden saying they are \u201con the brink\u201d of a breakthrough. A draft agreement for the exchange of prisoners and the gradual withdrawal of Israeli troops from Gaza was presented to both sides yesterday, with another round of talks taking place today in Doha. Officials from both sides have confirmed that talks are progressing well. (Bloomberg<\/a> | Reuters<\/a> | FT<\/a> | Semafor<\/a>)<\/p>\n

The goal is now to reach an agreement before US president-elect Donald Trump\u2019s inauguration next week<\/strong>, officials said. Vice President-elect JD Vance said he hopes an agreement could be struck toward the final days of Biden\u2019s administration. <\/p>\n

Meanwhile, the US\u2019 new AI export caps are getting plenty of attention.<\/strong> The US imposed export controls on chips used for AI, giving 20 close allies access to chips and restricting access to 120 countries, including China, Iran, and Russia. <\/strong><\/p>\n

The semiconductor industry is not happy with the new export control regime, and neither is the EU.<\/strong> The European Commission said it is \u201cconcerned\u201d about the new measures, while industry leaders like Nvidia criticized<\/a> the move as potentially harmful to \u201cAmerica\u2019s global competitiveness.\u201d (FT<\/a> | Reuters<\/a> | WSJ<\/a>) <\/p>\n

Also getting attention:<\/strong><\/p>\n