CAIRO: Egypt’s tax revenue rose 6 percent in the fiscal year to June 30 after an unexpected surge in economic activity, the finance minister said on Sunday.
Egypt’s economy, which withstood the worst of the global economic crisis that began in mid-2008, was buoyed last year by resurgent tourism and Suez Canal receipts, along with resilient construction and gas exports.
"Last year, the national economy regained its strength faster than we had expected. Activity appeared in economic sectors where it was unexpected," Youssef Boutros-Ghali told a news conference.
Tax revenue in fiscal 2009/10 reached LE 148 billion ($26 billion), LE 12 billion more than budgeted, he said.
"Because of our reforms, taxes have begun to respond directly to the country’s economic activity. The more activity, the more revenue," he added.
Egypt reduced its income tax to a flat 20 percent for most income brackets in 2005, slashed customs duties and enforced tax reporting more strictly.
Egypt’s economy grew by 4.7 percent in 2008/09, down from about 7 percent over each of the previous three years.
"For last year, we believe the economy grew by 5.2 or 5.3 percent. We had not been projecting 5.2 percent," Boutros-Ghali said.
Final growth figures for 2009-10 are not due out until next month.
"Sales were greater than we expected and profits were more than we expected," he said, adding the sales tax was the most significant indicator, because it immediately reflects any increase in economic activity. –Additional reporting by Alexander Dziadosz and Shaimaa Fayed
