Egyptian Government Confirms No New Taxes in 2024-25 Budget

The Egyptian government has confirmed that no new taxes will be imposed in the 2024-25 budget, according to the Deputy of Planning and Budget in the Parliament. The government presented the new budget, which aims to consolidate Egypt's 59 state economic entities into a single Public Government Budget for the first time.

The 2024-25 budget targets a 4% growth rate, a narrowing of the budget deficit to 6%, and a reduction of public debt to 80% of GDP by June 2027. The government is also targeting a primary surplus of 3.5% for the next fiscal year, which will be achieved through a 30.7% year-on-year increase in tax revenues to LE2.2 trillion.

The budget includes increased allocations for subsidies, grants, and social benefits, as well as for the education and health sectors. The government's socioeconomic development plan targets economic growth of 4.2% in 2024-25, with a focus on increasing the private sector's contribution to the economy to 65% over the next three years.

Why this matters: Egypt's economy has faced challenges due to the ongoing crisis in Gaza, which has slowed tourism growth and cut into Suez Canal revenue. The government's commitment to not imposing new taxes and focusing on economic growth and private sector development is essential for the country's recovery and stability.

The government has increased the amount of funding required in its 2024-2025 budget by over 2.8 trillion pounds (59 billion) to alleviate the inflationary effects, improve the standard of living, and meet the developmental needs of citizens. The allocation of spending in the budget will also reflect the needs of individuals by increasing spending on health and education and aiming to improve job opportunities.

The confirmation of no new taxes came in response to concerns raised during a symposium organized by the Egyptian Center for Economic Studies (ECES) to examine the state of financial markets in Egypt. Experts at the symposium expressed cautious optimism about Egypt's financial market prospects, despite the ongoing challenges of high inflation. They highlighted the need for transparent tax policies and systematic financial policies to support investment in the country.

In a related development, the Prime Minister chaired a meeting to discuss efforts to ensure the availability of essential and basic commodities and increase their strategic reserves. "The Prime Minister emphasized the importance of maintaining sufficient stocks of essential commodities and building a strategic reserve to allow the state to intervene during crises, stabilize prices, and prevent manipulation of goods like wheat, oil, sugar, corn, and others," according to a statement from the meeting.

The government's efforts to secure strategic reserves of essential commodities, including signing contracts for 500,000 tons of sugar and having a substantial reserve of wheat, aim to stabilize prices and meet citizen needs. The banking system is prepared to provide the necessary dollar funds to bolster these strategic reserves.

The Egyptian government's confirmation of no new taxes in the 2024-25 budget, along with its focus on economic growth, private sector development, and securing strategic reserves of essential commodities, demonstrates its commitment to addressing the country's economic challenges and improving the standard of living for its citizens. The increased allocations for subsidies, grants, social benefits, education, and health in the budget reflect the government's efforts to meet the developmental needs of

Key Takeaways

• No new taxes in 2024-25 budget, aims 4% growth, 6% deficit, 80% debt/GDP.
• Budget targets 3.5% primary surplus via 30.7% increase in tax revenues.
• Increased allocations for subsidies, education, health, and social benefits.
• Govt. to consolidate 59 state entities into single Public Government Budget.
• Govt. secures strategic reserves of essential commodities to stabilize prices.