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Thursday, 13 August 2020

Egypt's parliament to discuss new financial laws Sunday

The finance minister said the coronavirus has negatively impacted state revenues and put a tremendous squeeze on the budget

Gamal Essam El-Din , Saturday 4 Jul 2020
File photo: Egyptian parliament (Photo: Reuters)
File photo: Egyptian parliament (Photo: Reuters)
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Egypt’s House of Representatives will convene from Sunday to Tuesday to discuss 10 bills and two international agreements.
 
Most of the bills concern mitigating the negative economic impact of the coronavirus pandemic on state coffers, as well as generating additional financial resources necessary to cut debts and plug the budget deficit.
 
The first draft law will earmark an additional allocation of EGP 80 billion to the new 2020/21 budget.
 
Minister of Finance Mohamed Maait told members of parliament's budget committee on 1 July that the new allocation is necessary to settle part of the Ministry of Electricity’s debts to the Ministry of Petroleum.
"These debts have reached a total of EGP 102 billion, and we want to use the additional budgetary allocation to settle part of this debt," said Maait.
 
He indicated that part of the new allocation will be used to pay part of a total EGP 160.5 billion in government installments that are due to the Insurance and Pension Authority.
 
Maait said the breakout of the coronavirus pandemic has made it difficult for the 2020/21 budget to settle the above-mentioned payments, and so it was necessary to earmark the additional allocation of EGP 80 billion to do so.
 
Closely related is a new draft law aimed at setting up a fund to mitigate the negative impact of pandemics and natural disasters.
 
Minister Maait said the bill, which is officially called the Mutual Support Contribution Necessary to Mitigate the Economic Consequences of the Spread of Pandemics or Natural Disasters, aims to generate additional revenue necessary to contain the economic impact of the coronavirus.
 
Article 1 of the draft law states that one percent will be deducted from the monthly net income of each state employee, beginning from 1 July and lasting for one year. Article 2 states that 0.5 percent of the net pension of each retired employee will be also deducted for the same duration. 
 
However, the draft law states that state employees and pensioners who receive less than EGP 2,000 in net income per month will be exempted from this deduction.
 
Minister Maait said these deductions will generate between EGP 8 billion and EGP 10 billion in revenue.
 
"They will be put in a takaful mutual support fund to help the state to mitigate the economic impact resulting from the spread of pandemics such as the coronavirus or from natural disasters," said Maait.
 
Maait said the coronavirus has negatively impacted state revenues and put a tremendous squeeze on the budget.
 
"Please also remember that the new 2020/21 budget has already allocated EGP 34 billion to increase the salaries of state employees in the new fiscal year," said Maait, arguing that the above obligations and other financial pressures compelled the government to submit the draft law on the mutual support contribution fund.
 
In the same context, parliament will discuss a bill that will increase financial bonuses granted to doctors and medical staff in charge of treating patients infected with the coronavirus and other epidemic diseases. The bill, an amendment to an 18-article law regulating the affairs of members of medical professions (Law 14/2014), will set up a compensation fund to repatriate doctors and medical staff who face the risks of fighting the coronavirus while treating patients in hospitals.
 
Parliament will also discuss a two-article bill that will allow the finance ministry to offer EGP 3 billion in guarantees to the Water Holding Company to help it implement its drinking water and desalination projects.
 
The schedule of debate will include discussing a draft law that aims to help settle tax disputes in terms of allowing the finance ministry to give up fines imposed on tax arrears. The bill, an amendment to four articles of the Law on Settlement of tax Disputes (Law 79/2016), aims to encourage taxpayers to settle their tax payments on time and without facing fines or arrears.
 
MPs will also discuss an amendment to two articles of the Intellectual Property Law (Law 82/2002), with the objective of sponsoring talented physically challenged individuals.
 
Parliament will discuss amendments to 19 articles of the law on the activities of small-scale industries. The bill, an amendment to Law 141/2014, aims to give new facilities to medium- and small-scale enterprises to be able to meet industrial and commercial needs.
 
The schedule also includes discussions of amendments to four articles of the law regulating the expropriation of private property for public interest (Law 10/1990). The bill will tackle payments which will be given to individuals whose property will be expropriated to be used in public interest projects.
 
MPs will discuss another technical law regulating public contracts (Law 182/2018).
 
Parliament will discuss a draft law which seeks to fight cheating in school exams. The four-article bill also aims to stem the tide of the phenomenon of leaking exams via social media.
Parliament's Secretary-General Mahmoud Fawzi told reporters that the newly-appointed heads of the country's press and media organisations who were named by President Abdel-Fattah El-Sisi on 24 June will be sworn in before parliament on Sunday. The three heads are:
Karam Gabr, head of the Higher Council for Media Regulation. 
Abdel-Sadeq El-Shorbagi, head of the Higher Press Organisation. 
Hussein Zein, head of the Higher Media Organisation.
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