Minister of Finance Mohamed Maait has announced that the Cabinet has approved some amendments to the Unified Public Finance Law and sent it to the House of Representatives for discussion next week.
In a statement issued by the Ministry of Finance on Monday, Maait explained that the amendments aim to create a “general government budget” that encompasses all the revenues and expenses of the state’s general budget and 59 economic bodies, to achieve the principle of budget comprehensiveness.
He said that this will be done gradually over five years, starting from FY 2024/2025, which will include the state’s general budget and the budgets of 40 economic bodies, subject to the Parliament’s approval.
He added that for the first time after the enactment of these amendments, the government will submit 61 budgets, comprising the general government budget, the budgets of 59 economic bodies, and the general state budget.
Maait noted that these amendments entail a fundamental change in the state’s public finances, which will help improve the financial indicators. He pointed out that the general government budget includes the revenues of the state’s general budget and 59 economic bodies, totaling nearly EGP 5trn, while the state’s general budget revenues only amount to EGP 2.1trn, resulting in inaccurate indicators.
The Minister of Finance stated that a limit for the debt of budget agencies and economic bodies is set annually with the relevant state authorities. It cannot be exceeded without the parliament’s approval, in line with the state’s efforts to reduce the debt-to-GDP ratio to a sustainable level.
He also said that the goal is to extend the maturity of the budget agencies’ debt to four years in the medium term, instead of three years, to decrease the need for short-term financing.
He reported that the debt-to-GDP ratio had dropped from 103% in June 2016 to about 80% of GDP in June 2020, but rose again due to inflation and high interest rates, reaching 95.7% in June 2023.
Maait also indicated that the Egyptian tax policy strategy document 2024/2030 will be presented to the national dialogue next week. He assured that it does not impose any new burdens on investors or change the tax rates or structure.
The government continues to support the export sector, despite all the internal and external challenges, according to Maait. “We are working to launch a new phase of the instant cash payment initiative to support exporters. Moreover, about EGP 54bn have been paid to exporting companies since the launch of the initiatives to settle the overdue dues to exporters in October 2019,” he said.
Maait also mentioned that the state’s public treasury covers the value of the property tax on the buildings used for some industrial and productive activities, representing 21 economic sectors, for three years until the end of 2026, which amounts to EGP 1.4bn annually.
