Deputy Minister of Finance for Fiscal Policies and Institutional Reform, Ahmed Kouchouk, announced significant strides in establishing tax neutrality principles to bolster the private sector’s contribution to the nation’s GDP.
The government’s commitment to competitive fairness is evident in the recent legislation that eliminates preferential tax, customs, and other benefits for state entities engaged in investment and commercial activities. This move is designed to level the playing field and stimulate private investment, which Kouchouk asserts is crucial for driving economic growth and fostering sustainable development.
Speaking at the Egyptian Competition Authority’s (ECA) inaugural annual conference, Kouchouk revealed an ambitious public investment target of one trillion pounds for the upcoming fiscal year. This target is part of a broader strategy to redirect substantial funding towards the private sector, thereby enhancing market competitiveness, increasing economic productivity, and amplifying the private sector’s role in economic activities.
Kouchouk highlighted the State Ownership Policy Document as a pivotal framework supporting the shift toward a more competitive economy. The government issues biannual reports detailing the measures, reforms, and steps taken to realise the document’s objectives, including the outcomes of divestment transactions. In addition, a monthly report on public contract results related to budgetary authorities is published, underscoring the state’s dedication to transparency, disclosure, and equitable competition.
A high-level ministerial committee is currently evaluating the performance of economic entities to ensure adherence to fair competition principles.
ECA Chairperson Mahmoud Momtaz emphasised the Authority’s central role in nurturing competition, opening markets, and enhancing the Egyptian economy. Over the past two years, the ECA has scrutinised approximately 78 legislative acts to promote competitive neutrality.
Momtaz reported that the ECA’s 2021-2025 strategy, in line with Egypt’s Vision 2030 and sustainable development objectives, has been successfully executed over the initial three years. The Authority has surpassed its targets, particularly in enforcing laws against anti-competitive practices and upholding competitive neutrality.
He stressed that a robust competition policy guarantees equal regulatory conditions for all market participants, regardless of ownership or origin. Achieving this requires effective coordination with relevant parties and institutions. While fostering competition presents challenges, Momtaz believes it is achievable.
He also addressed the cultural resistance to competition and competitive neutrality, noting the Authority’s efforts in conducting over 84 workshops for government procurement officials and establishing more than 10 protocols with various entities in the last two years.
Momtaz outlined the evolutionary stages of competition authorities globally, from inception to legislative consultation, referencing the 2014 amendment as a significant milestone. The current focus is on deepening the understanding and implementation of these principles.
Stephane Guimbert, Country Director for Egypt, Yemen, and Djibouti in the Middle East and North Africa, observed that the Egyptian market features diverse competitive landscapes across 30 sectors, with the private sector accounting for 35% of GDP.
Guimbert warned that a lack of market competition could significantly impact the private sector and small and medium-sized enterprises (SMEs). He commended the government’s recent initiatives to integrate the private sector into business operations and expressed confidence that the State Ownership Policy Document would further empower the private sector.
He affirmed the World Bank’s keen interest in facilitating private sector access to financing under the State Ownership Policy Document, providing opportunities for growth and production.
