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Tuesday, 21 September 2021

Cash-strapped Egypt sets sights on Mubarak-era deferred taxes

In hopes of controlling budget deficit, government offers unspecified incentives aimed at quickly collecting long-deferred taxes from public, private sectors

Ahram Online , Tuesday 3 Jan 2012
Youssef Boutros Ghali
Differed taxes are due to private and public sector since years under Hosni Mubarak’s last finance minister Youssef Boutros Ghali. (Photo:Reuters)

While the government looks for loans with which to finance its increasing budget deficit, it has reportedly accrued some LE60 billion (around $10 billion) in deffered taxes.

Now, for the first time, the government is talking about tangible means of collecting these funds. Finance Minister Momtaz El-Said announced on Tuesday that a government decree could be issued within hours offering incentives to those who pay their deffered taxes up to the end of March 2012.

The minister, however, did not specify exactly what kind of incentives would be offered.

Deffered taxes from both the private and public sectors accumulated for years under ousted president Hosni Mubarak’s last finance minister, Youssef Boutros-Ghali.

The latest announcement was made at a press conference following a ministerial meeting that included the prime minister. At the same press conference, Planning and International Cooperation Minister Fayza Abul-Naga reassured reporters that the government was committed to maintaining the budget deficit for fiscal year 2011/12 at LE134 billion (roughly $22.2 billion), denying reports that the deficit would exceed this figure.

Some government sources, however, including the governor of Egypt’s central bank, have previously said that the deficit for the period could reach as much as LE180 billion.

Egypt is also considering possible loans from the International Monetary Fund.

An austerity plan was unveiled earlier aimed at shaving between LE20 and LE23 billion off the current deficit.

Details of the plan, however, remain unclear until now.

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