Egypt’s Minister of Finance Mohamed Maait told MPs in a plenary session on Sunday morning that the coronavirus crisis had led to the country losing EGP 3 billion in state revenues over the last three months.
Maait’s statements came during a parliamentary discussion of a new law that would establish a fund to mitigate the negative impact of pandemics and natural disasters.
Maait told MPs that the bill, which is officially called the Mutual Support Contribution Necessary to Mitigate the Economic Consequences of the Spread of Pandemics and Natural Disasters, aims to stem the tide of the economic losses incurred due the negative impact of the coronavirus.
“The government is committed to meeting its social needs despite a crunch in revenues and an increase in expenditures caused by the coronavirus,” said Maait.
The minister swore that “not a single Egyptian pound of the mutual support fund’s money will go to the state treasury.”
“The fund’s money will be mainly allocated to addressing infectious diseases and pandemics like the coronavirus,” he said.
Article 1 of the bill states that 1 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.
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 mitigate the economic impact resulting from the spread of pandemics such as the coronavirus or from natural disasters," said Maait.
The seven-article bill was approved by MPs. Parliamentary speaker Ali Abdel-Aal, however, indicated that the final approval will be postponed until a two-third majority of MPs is available.
Abdel-Aal said the coronavirus pandemic has negatively impacted most countries worldwide. “Some countries resorted to reducing salaries and others opted to set up mutual support funds to help mitigate the economic cost of fighting pandemics,” he said.
The parliament also approved a number of draft financial laws on Sunday.
The list includes a two-article bill that will allow the finance ministry to offer EGP 3 billion in guarantees to the Holding Company for Water and Waste Water to help it implement its drinking water and desalination projects.
Also approved was a draft law that aims to help settle tax disputes by 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 no. 79 of 2016), aims to encourage taxpayers to settle their tax payments on time and without facing fines or arrears.