Egyptian Parliament initially approves deducting 1% from salaries for COVID-19 response

Fatma Lotfi
3 Min Read

The Egyptian Parliament’s planning and budget committee initially approved, on Wednesday, a draft law that will see 1% deducted from all salaries to face the economic repercussions of the novel coronavirus (COVID-19). The deduction will also be used to help counter natural catastrophes.

The draft law, presented by the cabinet on 20 May, requires all the country’s public and private sectors employers to deduct 1% of their employees’ net monthly incomes during fiscal year (FY) 2020/21. Pensions will also see a 0.5% deduction over the same period. The salary deductions will be applied for a period of 12 months, beginning in July.

Employees with monthly salaries of EGP 2,000 or below and pensioners who receive EGP 2,000 or below will be excluded from the deductions.

The draft law allows the Prime Minister to issue a directive to either totally or partially exempt the sectors hardest hit economically by the coronavirus pandemic.

The money will be deposited into an account at the Central Bank of Egypt (CBE). It will be allocated to support economic sectors and small- and medium-sized enterprises (SMEs) affected by the global pandemic, and pay financial subsidies to workers in these sectors.

The finances collected will be also allocated to support vulnerable families and individuals, as well as to fund medical research and improve the healthcare system. The move comes as Egypt continues to combat the various economic impacts of the coronavirus.

As part of the government’s reopening plan to co-exist with the novel coronavirus, the nationwide night-time curfew was lifted on 27 June, after having been in place for just over three months.

Restaurants, coffee shops, sports clubs, cinemas, theatres, and some cultural and social venues also reopened on 27 June after three months of closures, amid fears of a second wave of coronavirus infections. On Tuesday, Egypt’s total confirmed cases stood at 68,311 and 2,953 fatalities.

Last Friday, the International Monetary Fund (IMF) approved a 12-month Stand-By Arrangement (SBA) worth $5.2bn to Egypt, to help the country cope with the economic challenges posed by the global pandemic.

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A journalist in DNE's politics section with more than six years of experience in print and digital journalism, focusing on local political issues, terrorism and human rights. She also writes features on women issues and culture.