By Islam Zayed and Mohamed Abdel Monsef
The Government has prepared a new bundle of legislation aimed at increasing national revenue and alleviating budget strain. The legislation is scheduled to be enacted by year’s end.
The Ministry of Finance (MOF) will enact further legislation to collect overdue taxes. The new bill resembles the tax payment motivation law, which was issued at beginning of the year and helped collect EGP three billion. The new bill stipulates that late taxes will be reduced by 10 percent if paid before the year’s end. In addition, the bill aims to link national ID numbers to banks’ financial data through coordination with the Ministry of Communications and the Central Bank.
The Ministries of Finance and Justice are planning to reassign the Real Estate Publicity Department (REPD) to collect real estate transaction taxes (RETT). In addition, public notaries in court houses will be responsible for confirming the authenticity of signatures in real estate transactions, and unifying the value of flat-rate property tax at 2.5 percent of a property’s value.
The REPD stopped collecting taxes in 2005 under orders from the MOF when real estate laws were instated to avoid duplication in tax collection. However, disabling the real estate laws forced the MOF to reconsider RETT, through which the MOF hopes to collect EGP 800 million.
Sources at the MOF denied the measures taken towards increasing the national revenues were part of the IMF’s conditions for granting a loan to Egypt; they explained that these measures are entirely domestic in origin and they were prepared before the negotiations with the IMF.
Other sources revealed the Government’s intention to support farmers. A new programme will be formulated to subsidise essential crops and purchase them for a fair price from farmers. Minister of Agriculture and Land Reclamation (MGLR) Salah Abdel Momen, has finalised a Strategic Crops Prices Balancing Fund (SCPBF). Abbas El-Shennawy, Service Sector Director at MGLR, said that the fund would deposit EGP one billion at an Egyptian bank, 50 percent of which will be financed by agricultural companies and the rest by the Government. The deposit yield is intended to make up for farmers’ losses caused by fluctuation in prices for domestic production.
Abdel Momen called for government restrictions on the strategic importation of crops. He explained that many import these crops at the same time as the domestic harvest, which is damaging to the domestic industry. Governmental restrictions would balance the domestic price against the international one in order to protect farmers. He added that farmers are demanding the reinstatement of agricultural regulations. However, this requires a new parliamentary legislation. In addition, MGLR is keen on voluntarily implementing the regulations until laws change and countrywide execution is made possible.