Egypt: Finance Minister - New Budget Needs Additional Egp 130 Billion

Minister of Finance Hani Qadri said the budget of FY 2014-2015 will be completely restructured to provide L.E 130 billion, needed for meeting the commitments of the constitution, in terms of increasing expenditure on education, health, scientific research and wage raises.

However, the readjustment needs huge reform policies, envisaging cutting the electricity subsidy over two phases, ending within 7 - 10 years to reaching the global prices, he said. This, in addition to expanding the base of tax-payers to include all incomes and profits, the minister added, denying any tendency towards imposing taxes on Egyptian expats.

The enforcement of the third phase of the value-added tax will increase the rate of inflation by 1 per cent for once, Qadri said, affirming that taxes could not be increased in light of the slack growth of the national economy.

The 5% tax that he proposed to be imposed on the rich is meant for their income and not for their wealth, intensifying that such a tax is designed to encouraging businessmen to implement services or development projects for helping the citizens and the society.

The minister further underlined that there is no alternative for restructuring the budget to decreasing the deficit, otherwise it will surge to 14%, a matter which will have a negative repercussions on the economy.

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