Financial policies to control the budget deficit are considered the most powerful governmental tool to enhance Egyptians’ lives, said Egyptian Minister of Finance Hany Kadry Dimian.
“The stock profit tax has absolutely nothing to do with the remarkable decline in the stock index during the last period,” explained Dimian. The indices dropped down as a corrective result after going up in the last period of time in accordance with the positive news; for example, the rise in Egypt’s credit rating, as well as political stability and security.
As per his declarations on CBC channel in response to the questions raised by former minister Ziad Bahaa El-Din, Dimian said that the government has a clear plan. The 22.5% tax will be implemented on the new tax returns, given that the 5% exceptional tax that raised the total tax to 30% shall be very soon cancelled, he added.
The maximum tax rate before the amendment was 25% in a single category with regards to the companies’ taxes, and in four categories with regards to individuals.
The new investment law is considered a complementary effort to the government’s moves towards economic reform and the creation of a business environment that would help attract more Arab and foreign investment flows, said Dimian. He also commented on the government’s moves towards increasing education, health and housing allocations.
“The government is working within the limits of its revenues. We are striving to reduce the budget deficit, the main reason behind inflation that haunts and provokes the anger of Egyptians via tools, among which the most important is the restructuring of the energy subsidy,” he added.
With regards to the rise of petroleum product prices, Dimian said: “I refuse to shorthand Egypt’s economic and financial policies in restructuring energy support as well as reducing prices.”
The restructuring plan includes tightening the control over the circulation and distribution of subsidy smart cards and liberalising the energy sector. In addition to speeding up the steps to import gas as a solution to the urgent crises, the minister stressed upon the fact that the restructuring plan surpluses will be directed to social protection programmes.
The raise in Egypt’s credit rating will contribute in reducing the cost of liquidity, said Dimian.
On Friday, Standard and Poor’s announced that it is raising its evaluation rate of the Egyptian economy to a positive outlook instead of stable.
“This is the fourth positive action by the global rating agencies over the last seven months towards raising the evaluation rate of the Egyptian economy,” added Dimian.
“The government is proceeding with the implementation of economic and financial reform. The reform will improve the performance of Egypt’s economy, raise employment rates, and develop basic services as well as spending on the improvement of social protection programmes.”