The Egyptian parliament’s budget and planning committee approved in a meeting on Sunday morning a draft law aiming to impose “a financial development fee” on a number of items including gasoline and diesel fuel, football contracts, the licensing of sporting services, and pet animal food.
The draft, an amendment to law 147/1984 on the imposition of “a state financial resources” development fee, will levy a fee of 30 piastres (a third of one Egyptian pound) on each litre of gasoline and 25 piastres (quarter of one Egyptian pound) on each litre of diesel.
Members of the committee, however, rejected the abovementioned fees, saying that gasoline and diesel sales should be exempted.
The draft law would also impose fees on contracts related to the buying, selling, and lending as well as renewing the contracts of Egyptian and foreign football players. Fees will be also imposed on companies involved in offering sporting services, and on the food used by pet animals (dogs, cats, and decorative birds), and sales of mobile phones and accessories.
Finance Minister Mohamed Maait told parliament’s budget and planning committee on Sunday morning that the draft law comes out of necessity and aims to contain the disastrous impact of the international economic crisis caused by the spread of the coronavirus.
“Please know that a finance minister is not a magician and he does not have a magic wand to procure financial resources,” said Maait, adding that “we as a government have a lot of duties such as offering subsidised goods and spending on services, and in this respect we seek to generate new financial resources as long as these will not be a new burden for ordinary citizens.”
Maait argued that additional financial resources are also important to cut the budget deficit, contain debts and avoid any rise in prices or inflation rates.
Some MPs like Talaat Khalil, the committee’s deputy chairman, criticised the legislative amendment, arguing that “it shows that the government lacks political sense because the amendment comes at a time when all citizens are suffering from the bad impact of the coronavirus.”
Khalil said imposing fees on diesel will be particularly biting because it will raise transport prices for poor citizens.
In response, Maait insisted that “the government has a strong political sense and we know politics very well.”
“We are people with a high sense of responsibility and we have been studying this amendment since 2018 and so we are trying our best to contain the negative impact of the current international economic crisis,” said Maait, revealing that “the new fees on gasoline and diesel products alone will generate EGP 6 billion in state revenues, and EGP 15 billion in total."
Maait vowed that the new fees will not lead to any rise in prices.
“This new measure is important to secure the country’s economic future, and make sure that we have adequate financial resources to meet our obligations such as paying the salaries of state employees,” said Maait.
Maait said that “nobody knows for sure when the world will get out of the coronavirus crisis and there is no doubt that the country’s sovereign revenues will be adversely affected by this pandemic, and so we are trying to take preventive measures that aim to boost the state revenues and soften the blow of the crisis on poor and limited-income citizens.”