Egypt's finance minister has welcomed suggestions the country raise its income tax ceiling to 30 per cent and swiftly implement a value added tax system.
Hazem El-Beblawi was speaking during a Monday meeting with the General Federation of Investors Unions (GFIU) during which he praised the role of Egyptian industry and expounded on the country's economic crisis.
During the meeting, the GFIU proposed raising Egypt's tax ceiling from 25 to 30 per cent with the union's president, Mohamed Farid Khamis, saying that higher rates in major economic powers such as the United States, the UK and China have not pushed investors away.
Beblawi said that he was in favour of applying a progressive taxation scheme, but he warned it should be applied at an appropriate time so as not to send the misleading message that Egypt is drifting away from free market principles.
But Beblawi added that the government is studying all suggestions presented from investors and industrialists on raising taxes and introducing more lenient measures in Egypt’s work environment.
Reflecting on Egypt's perilous finances, the minister told business heads he saw two main reasons for the crisis: a decline in liquidity and a lack of confidence in Egypt's political and economic future.
He said the way out of the crisis lies in re-establishing trust in the government and rebuilding faith between individuals and institutions in Egyptian society.
Beblawi also stressed the role of 'men of industry' such as those attending the metting, saying they represent Egypt's real future in their efforts to modernise production with modern technology.
The biggest problem for Egypt's budget, according to the minister, are energy subsidies for industry. Solving it, however, requires long term policies so the removal of subsidies does not result in price rises for consumers.
Beblawy also said that recent labour protests had come at the wrong time and he urged workers to wait until later to push for their demands.
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