Egypt deficit widens to 44.8 billion in July-October

Salma El-Wardani , Thursday 2 Dec 2010

Civil servant wages contribute to Egypt's widening budget deficit

Total revenues decreased by 1.5 percent during July- October 2010/2011, registering LE52.3 billion compared to LE53.1 billion during the same period last year. The recorded decrease is principally due to the 33 percent decline in non-tax revenues, which offsets the 12.4 percent increase in tax revenues, a monthly report from the Ministry of Finance said on Wednesday.

The financial monthly report of December 2010 released on Wednesday shows the recent increase in tax revenues items comes from the step up in revenues from indirect taxes on goods and services (VAT), recording an increase of 17.1 percent from a year earlier, leveling LE21.4 billion.

Overall, budget deficit rose by around LE4 billion in during July-October, despite an increase in revenues. Taxes on income, capital gains and profits increased, albeit at a slower pace, by 2.4 percent, to LE11.8 billion.  

In addition, revenues from taxes on international trade have increased by almost 22 percent to LE4.6 billion during July- October 2010/2011 compared to LE3.8 billion the same period last year.

Revenues from property taxes increased by 13.2 percent to LE3.3 billion compared to LE2.95 billion during July- October 2009/2010, mainly due to taxes collected on T-bills and T-bonds’ payable interest that have been reclassified as part of property taxes starting 2009/2010 and account for LE2.6 billion during July- October 2010/2011.

Expenditure, on the other hand, rose by 3.9%, due to a rise in wages of civil servants and to interest rate payments on domestic debts.

As a result, the overall deficit widened reaching almost LE44.8 billion, compared to LE40.6 billion during July-October 2009/2010. This amount represents 3.3 percent of GDP.





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