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Finance Ministry expects EGP11bn from special funds and accounts for FY 2014/2015: Ministry official - Daily News Egypt

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Finance Ministry expects EGP11bn from special funds and accounts for FY 2014/2015: Ministry official

Annual profit deduction of 10% compared to last year’s 20%, to strengthen involvement of governorates in development projects

A finance ministry official expects ministry profits to come in approximately EGP11bn after deducting 10% of special accounts and funds and incorporating them into the general budget.

“The deduction percentage for accounts and funds has been reduced to 10% from 20% in last year’s budget in order to enable provinces to undertake their role in local development processes,” said a ministry official who preferred to remain anonymous.

The law tying the funds to the budget for this year stipulated that the Finance Ministry receive 10% of private accounts and funds annually. This runs contrary to what was stipulated in the budget of the fiscal year (FY) 2013/2014.

Under the FY 2013/2014 budget, the general budget was to receive 20% of the profits of private accounts and funds.

“It seems that corruption is the largest authority in Egypt,” said Rada Eissa, economic researcher at the Center for Economic and Social Rights, who criticised the decision, “The government should have raised the rate in order to slam the door on corruption from behind.”

Eissa said revenues from the accounts and specials funds is more than EGP60bn per year. The former finance minister, Mumtaz Al-Saeed, said the special funds revenue in Egypt is upwards of EGP66bn.

Baher Atlam, a professor of public finance at Cairo University said that decreasing the percentage to 10% is  a “commendable” means of directing the funds to their allocated purposes.

Despite seeing the special fund’s survival as inevitable, Atlam said: “The special fund must be subject to oversight from the Central Auditing Organization so that it is not a back door for corruption, as this is public money.”

The official said the Ministry of Finance does not require money from special funds for its development goals in the governorates and activities which the funds provide for.

The fiscal deficit target for the FY 2014/2015 budget is EGP240m.

President Abdel Fattah Al-Sisi had refused to ratify the draft budget at the end of June 2014, as it would have raised the fiscal deficit to EGP288bn. It was reduced in the new budget to EGP 240bn.

The official added that there will be a reduction from the fund’s cumulative revenue versus the one-time reduction under former president Mohamed Morsi, rather than a reduction in percentage. He added that the issue of the deduction from the private funds has not  changed from the previous fiscal year.

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