Egypt’s Prime Minister Mostafa Madbouly announced on Tuesday a major package of measures to help the economy fight the effects of the novel Coronavirus’s (COVID-19) fallout.
The government will decrease the price of a cubic metre of natural gas for industrial use to $4.5 per million thermal units, as well as delay real estate tax payments for factories and tourist facilities for a 3-month period.
Helping the industrial sector, Madbouly said the government is to decrease electricity prices for heavy industrial uses by 10 piastres and will hold other industrial electricity prices unchanged for the next 3-5 years.
Egypt is to allocate EGP 1bn for exporters during March and April to repay their entitlements, and reduce stamp duty for non-residents to 0.125%, and 0.05% for residents. In addition to halving capital gains tax for listed companies to 5%.
The country also plans to exempt instant stock transactions from stamp duty, he asserted, noting that the government will also exempt non-residents from capital gains tax, postponing it for residents until January 2022.
Egypt’s Ministry of Health has announced that the death toll of Covid-19 rose to six people after recording two new deaths, noting that 30 new people tested positive for the disease in 24 hours, bringing the total number of infected cases to 196 so far. While recovered cases have reached 26.
The decision was welcomed by the chairperson of the Egyptian Capital Markets Association (ECMA) Mohamed Maher, said that the decisions would lead the EGX to rebound, especially stamp duty reforms, the post moment of capital gains tax.
Similarly, Arab Moltaqa Investments Company (AMIC) Managing Director Khaled Abu Hai said that the package of incentives would revitalize the capital market, adding that it the time for investment banks to step in and attract smart money from foreigners.
He added that the stimulus would place Egypt as one of the top destinations for foreign investments after the repercussions of the coronavirus crisis disappears.
Karim Khadr, CI Capital Managing Director viewed the decision as a positive step, pointing out that exempting spot transactions from taxes will support the market and raise liquidity.
However, he said that stock market movements are affected by global exchanges as well as fear and panic due to the spread of the coronavirus globally. Khadr suggested that the fluctuation in the Egyptian market and other markets will continue until there are signs of controlling the coronavirus pandemic.
Egypt steps up restrictions to combat coronavirus outbreak
The government has adopted many preventive measures to combat the spread of the coronavirus, shutting down airports and halting air travels, reducing the presence of public sector employees.
The country has also closed schools and universities for two weeks and allocated an EGP 100bn fund to finance a comprehensive plan to stop the spread of the virus.
Tuesday, Governor of the Red Sea Amr Helmy, ordered on Tuesday all tourism staff to be placed under quarantine for 14 days until tests show they are negative.
The decision also bans the entry of domestic tourists for 14 days from the day of the last tourist’s departure, he said, adding that the staff will remain in the hotels, resorts, and restaurants where they work.
The move is intended to ensure the safety of Egyptians and tourists and prevent the spread of the virus, as a flight suspension from Thursday till the end of the month will mean that staff members might choose to leave and return to their hometowns.
During the aviation suspension, all touristic establishments in the country will be sanitised, while Red Sea governmental and non-governmental institutions will also have a thorough sanitisation process.
Meanwhile, the Minister of Manpower and Immigration, Mohamed Saafan, has directed EGP 500 as an exceptional grant for people in irregular employment registered in the government’s databases.
