Minister of Finance Mohamed Maait said in a discussion with the commercial and industrial community on Tuesday, that the ministry is keen on supporting national initiatives that contribute to stimulating commercial activity, localising industry, and alleviating the burdens on manufacturers.
He noted that there are development opportunities that attract investment in the system of partnership with the private sector, including projects in the sector of transportation, housing, electricity, health, education, local development, solid waste recycling, and strategic warehouses for the Ministry of Supply and Internal Trade in a way that contributes to deepening partnership with the private sector.
This aims to reduce production costs and enhance the competitiveness of Egyptian products in the local and global markets in a way that helps maximise production capabilities, reinforce use of local components, stimulate exports, and create more productive job opportunities.
He pointed out that EGP 200bn is allocated annually for the “Decent Life” initiative for the development of the Egyptian countryside and improvement of the livelihood of 60% of Egyptians.
Also attending the meeting were Ehab Abu Aish, the Deputy Minister of Finance for Treasury Affairs and Public Services; and Ahmed Kouchouk, the Vice Minister of Finance for Financial Policies and Institutional Reform.
Maait added that sovereign sukuks are among the rapid development solutions that are not immediate burdens on the public treasury and debt rates. The private sector provides the necessary financing for development projects, and payments are made from their returns.
“We are keen to lay the foundations of financial discipline and the sustainability of macroeconomic indicators. We are targeting a growth rate of 5.7% of GDP during FY2022/23, achieving a primary surplus of 1.5% and reducing the total deficit to 6.1%.
This brings the debt-to-GDP ratio down to less than 90% in FY2022/23, reducing the debt service ratio to total budget expenditures to less than 30%, compared to a target of 31.5% during FY2021/22, and extending the debt life to close to five years in the medium term instead of the current 3.4 years,” he said.
He added that the ratio of debt of the budget-financed authorities to GDP decreased from 108% in FY2016/17 to 90.2% at the end of June 2019, before the coronavirus pandemic, and witnessed a slight increase despite the unprecedented expansionary development policies adopted by Egypt, reaching 91.6% by the end of June 2021, a rate of 91.6% by the end of June 2021.
He explained that the average global indebtedness of emerging countries increased by about 17% and major countries by about 20% during the pandemic, pointing out that, in five years, the budget deficit was reduced by 50% in a way that reflects the importance of the economic reform programme and the achieved gains.
He stressed that in response to the commercial and industrial community, he will act immediately with the Minister of Trade and Industry to facilitate procedures for benefiting from the Law for the Development of Medium, Small, and Micro Enterprises in a way that contributes to the integration of the informal economy, so that there is no tax accounting for the informal economy projects that have applied for a temporary license to adjust their status.
He pointed out that the temporary license issued to each of these projects replaces any approvals or other legal procedures.
Furthermore, Maait said that the draft value-added tax (VAT) law approved by the House of Representatives included several new exemptions related to vital sectors with the aim of supporting the industry and stimulating economic growth.
He added that there is a draft law in the Ministry of Justice to amend some provisions of the comprehensive health insurance law, which includes deducting the symbiotic contribution from taxes and granting the Council of Ministers the right to exclude some revenues from being subject to the symbiotic contribution to the comprehensive health insurance.
Additionally, Maait pledged to study the proposals made by the commercial and industrial community in cooperation with the concerned authorities in a manner that contributes to stimulating investment and advancing the industry and the export sector.
This includes studying the establishment of a specialised authority to stimulate exports, approving tax and non-tax incentives to encourage the private sector to establish and manage vocational training centres supporting the industry, and studying the establishment of a unified entity serving the industry to help with their development, in addition to creating a combined certificate similar to a national number or a barcode for Egyptian products that guarantees the integration of its producers into the formal economy.
