Egypt targets reducing budget’s overall deficit to below 6% in FY2022/23: Finance minister

Doaa A.Moneim , Wednesday 2 Feb 2022

Egypt targets lowering the budget’s overall deficit to below 6.7 percent by end of FY2021/2022 and to below six percent in FY2022/2023, down from 7.4 percent in FY2020/21, Minister of Finance Mohamed Maait announced on Wednesday.


Egypt’s FY2022/23 begins in July 2022.

Maait made his statements during a meeting held with a segment of the industry sector representatives organized by the Egyptian Manufacturers Society.

Maait stated that FY2022/23 includes greater spending on development projects and gives a broader role to the private sector in the country’s economic activity, in accordance with the directives of President Abdel-Fattah El-Sisi for the sake of inclusive and sustainable development.

In addition, Maait noted that the government managed to reduce the debt-to-GDP ratio to below 90 percent by end of current FY2021/22 and intends to bring it down to less that 85 percent over the coming three years, down from 108 percent recorded in FY2016/17.

Maait told the industry sector representatives that the government is keen on extending further incentives to the sector and boosting local manufacturing, noting that 50 percent of taxes the manufacturers pay were deducted for the sake of stimulating investment.

He also said that the law that governs micro, small and medium-sized enterprises (SMEs) activity introduces tax and custom incentives for these projects.

Under this law, project owners with annual sales worth EGP 250,000 would pay EGP 1,000 in tax, while those with sales up to EGP 500,000 would pay EGP 2,500 and those with sales up to EGP 1 million would pay EGP 5,000 per annum.

In cases where sales range EGP 1 million, the owners would pay 0.5 percent of the sales value, while those with sales that range EGP 2-3 million would pay 0.75 percent and those with sales that range EGP 3-10 million would pay one percent of the total sales value.

During the meeting, the minister pointed out that the new law, approved during the week by parliament, includes amendments to the VAT and stamp duty laws, noting that it involves fresh incentives for the industry sector and extends tax waivers for the sake of boosting national manufacturing.

He also noted that the ministry is currently considering a number of proposals submitted by the industrial community regarding revisiting the real-estate tax on factories, noting that it will be decided before end of June in a way that fulfills the industrial sector’s demands.

For the export sector, the minister disclosed that EGP 31 billion of the exporters arrears have been disbursed under the cash repayment initiative launched in 2019.

In this respect, Maait revealed that the government is considering launching a new repayment initiative with an accelerated payment discount of eight percent, instead of five percent as in the previous one, in collaboration with the banking sector and the Ministry of Trade and Industry.

“Help us in merging the informal activities into the formal sector in order to collect the state’s public treasury receivables, increase the GDP and entrench the fair competitiveness in the local market. We also looking forward to your proposals regarding any new industries that need extra support to stimulate the economic activity,” Maait urged the industry sector.

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