(AFP Photo)
President Abdel Fattah Al-Sisi will decide legislation organising and governing investment in Suez Canal Axis within this week, said Hani Sarie Eldin, head of Sarie Eldin & Partners’ advisory law firm, on Tuesday.
He emphasised the cabinet would refer the law to the president within hours.
Sarie Eldin added that a General Authority for the Canal Axis economic zone will be in effect a month from now, and will include in its formation representatives of only four competent ministries. He continued that the government’s representation in the authority has been reduced in accordance with the Law of Economic Zones of a Special Nature.
In a conference to respond to inquiries regarding the Suez Canal Development Project, on Tuesday at Smart Village, Sarie Eldin said the new law did not oblige the authority to establish a major development company in the region. He also said the authority has the right to contract with the private sector for the task, without owning shares at a company.
Sarie Eldin said the law of economic zones of a special nature, which will organise investments in the Suez Canal zone, will exempt projects that direct their production to exports from customs by 100%. It will also affect other projects’ exemptions from tax on sales.
Yehia Zaki, Managing Director of Dar Al-Handasah which is responsible for the Suez Canal axis development project’s general plan, announced that President Al-Sisi looked into the final draft of the general plan of the project.
Zaki revealed that the company is preparing a non-technical edition of the general plan for the non-specialised. It would include negotiable investment projects to be distributed to embassies and all the interested investors. It will also be given to the Egyptian Embassy abroad to be available for international investors.
“We are currently negotiating with Suez Canal Authority and the concerned authority to prioritise projects and the sectors that would be prepared, so that they are presented to investors,” Zaki said.
He added that they plan to allow separate investment plans for every area as per the nature of investment activities.
Sarie Eldin, the legal advisor for Dar Al-Handasah in creating the plan for Suez Canal development project, said that all the investment projects in Suez Canal area will be subject to an income tax of approximately 22.5% and not 10% as was said. This way they would be equal to all the other investment projects.
The Egyptian government works to unify the tax to be at 22.5%, instead of 25% and 30% which were recently applied. Thus, tax on the rich people would be cancelled, which amount to an additional 5% on the 25% currently applied. This is within the government’s efforts to fix its tax policy in the coming period to assure investors.
Zaki commented that the relative weight of the tax in the investment decision is not significant; the business climate is the important thing, of which the government currently works on simplifying its procedures through legislative reforms, in addition to initiating a single-window to finish all licenses.
Sarie Eldin mentioned that the law will convert the Suez Canal Axis to an economic zone with a single-window system that has the authority to grant the investors all the needed licences. It will help them finish all the procedures needed for the investment, to pull the area out of the bureaucracy circle, the major obstacle for investment in Egypt.
