Al-Suweidi said that the country’s business community realised the need to support the government’s new plan at such a crucial time. The FEI further supported the government’s desire to restructure the country’s petroleum subsidies program, he said, adding however that clear steps needed to be taken to solve the country’s energy crisis and pursue alternative fuels. Any economic program would also need to include ways to incorporate the country’s black market into the official economy, he said, and doing so would require long term vision, and the implementation of specific incentives in order to encourage such inclusion.
He welcomed decisions made by the government to not increase sales taxes, as doing so would hurt the country’s economic interests.
Osama Al-Ta’abi, Deputy Chairman of the FEI, also approved of the government’s new economic plan, saying however that application of the program was important. He further expressed his support for expansion of the country’s smart card program as a means of reigning in petroleum smuggling. He did however criticise the government’s decision to set maximum wage limits for public sector jobs, saying many agencies required very specific technical skill sets in order to perform their functions.
Mahya Hafiz, Deputy Chairman of the Board of Directors of the Public Union of Industry Investors, said that the government’s plan to save the economy appeared positive at first glance, however lacked credible means of implementation and application.
He specifically criticised the government’s attempts to reign in black market trading by offering local vendors tax free status for a period of up to five years. He stated that the problem faced by such vendors was not with taxation but rather product specifications, saying that 99% of black market products did not meet official regulatory standards for usage.
Hafiz pointed to the need to change the country’s banking, credit and investment policies, particularly the former, which he described as moving “counterclockwise” in working to stimulate the economy and bring Egypt out of its current stage.
Egyptian investors, he said, have faced problems in funding and the means by which the government dealt with investors. He denounced continued price increases in land, services, electricity, water and letters of insurance, as obstacles currently facing investors.
Hafiz called for additional funding to be provided to closed-down factories and those operating at reduced capacity, the repeal of price increases for land and services, and the passing of new policies granting 5 year tax exemptions to investors seeking to re-operate such factories. He pointed out that there are currently 800 close-down factories throughout Egypt, in addition to 4,000 operating at reduced capacity.
Mohamed Fakri Abd Al-Shafi, member of the Board of Directors of the FEI, called on the government’s new plan to include provisions linking minimum and maximum wage limits for public sector jobs. He called for surpluses gained from maximum wage limits to be re-directed to help fund the wages of low income citizens.
He stated that Egypt’s business community had long called for black market trading activities to be incorporated within the country’s official economy, as doing so would increase government revenues and increase competition.
Al-Shafi further stated that timelines should be set for the implementation of Egypt’s smart card program, in addition to dates in which prices will increase for high consumption factories. Such policies he said should be incorporated into the government’s new energy roadmap, which looks to expand development in the sector while reducing consumption.
Mohamed al-Bahi, member of the Board of Directors of the FEI, stated that granting black market traders 5 year tax exempt status was a good start to begin reigning in trading within the country’s shadow economy.
He stated that addressing black market trading required the government’s attention, adding that incentives should be provided to vendors in order to encourage their incorporation into Egypt’s official economy, in addition to improving the quality of goods produced. Doing so he said would also require restructuring and review of the country’s tax codes in a way that would ensure justice for all.
Translated from Al Borsa newspaper
