One of the main aims of the draft law is to help offset the impact of local currency devaluation since January on poorer citizens. The most obvious impact of the free float for many Egyptians has been a sharp rise in the cost of imported goods. The NDP has also proposed reducing customs duties on imports of basic goods such as flour and sugar, but critics claim this would put excessive pressure on the government budget. Social subsidies account for nearly a third of total spending allocations, while the deficit has climbed to about 6.8 per cent of gross domestic product.
In an attempt to balance the equation, the NDP has also proposed introducing new austerity measures, including a 15 per cent tax on imports of non-essential goods such as luxury cars. These tax receipts would be channelled directly into relieving the public burden of subsidies.
As part of a broader masterplan to reform the country's tax system, the Finance Ministry in late September opened a one-stop shop for customs and tax expedition in Nasr City. The Model Customs & Tax Centre acts as an advice centre and collection point for taxpayers, as well as streamlining the process of clearing goods through customs. The project was part-financed by the US Agency for International Development, which also contributed $10.5 million worth of equipment for the centre.
A MEED Subscription...
Subscribe or upgrade your current MEED.com package to support your strategic planning with the MENA region’s best source of business information. Proceed to our online shop below to find out more about the features in each package.