Egypt’s parliament gave final approval to a package of laws aimed at raising the minimum wage of state employees, increasing their periodic bonuses, and giving tax facilities to investors.
Head of the House of Representatives’ Manpower Committee Mohamed Saafan explained that the first law aims to improve the income of state employees (employees affiliated with cabinet ministries) and expand their social protection, as it stipulates granting employees subject to the Civil Service Law a periodic allowance of 12 per cent of their basic salary.
Saafan said that the draft law also grants employees that are not subject to the Civil Service Law, being those affiliated with public sector companies, a special allowance of 15 per cent of their basic salary. Both allowances are paid to a minimum of LE150 per month.
The allowances will be added to salaries starting from 1 July.
According to Finance Minister Ahmed Kouchouk, the law comes upon the directives of President Abdel-Fattah Al-Sisi, who urged the government to continue supporting state employees within the framework of the state’s vision to enhance social stability, improve the quality of life, and advance sustainable development.
“The law also aims to strike a balance between raising the standard of living for state employees and public sector workers on the one hand and maintaining the state’s fiscal discipline on the other through carefully considered increases in wages and allowances that take into account the financial limits of the overall budget,” Kouchouk said.
He added that the increases will enhance people’s purchasing power and contribute to strengthening economic and social stability.
The law also includes an increase to the additional bonus for state employees of LE750 per month, starting in July, in addition to granting employees in public-sector and public-business sector companies a monthly bonus, with the stipulation that the total monthly income of a state or public sector employee after applying the increases is not less than LE8,000.
However, the discussion of the law saw a number of opposition MPs, including the liberal Wafd Party’s Spokesperson Mohamed Abdel-Alim and the leftist Tagammu Party’s MP Atef Maghawri, arguing that the planned increases do not keep pace with the rise in prices and the cost of living.
They called on the government to link wages to inflation and to grant larger increases to state employees, workers, and pensioners. Meanwhile, MPs affiliated with pro-regime political parties emphasised that the law comes within the framework of the social protection package aimed at improving the standard of living of workers while maintaining the state’s financial balance.
Abdel-Alim said that in his view the value of the allowances does not help state employees or workers to meet the cost of living. “While inflation rates are increasing by large margins, wage hikes are increasing by small amounts,” Abdel-Alim said, also wondering “about millions of unemployed people who are not part of the government’s social protection programmes.”
MP Abdel-Moneim Imam, head of the opposition Justice (Adl) Party and secretary-general of the House’s Budget Committee, said that since Mustafa Madbouli was named prime minister in June 2018, electricity prices have increased by 762 per cent, metro tickets by 925 per cent, butane cylinders by 1,150 per cent, 92 octane pertrol by 594 per cent, medicine by 300 per cent, and building materials by 600 per cent.
The prices of food have also spiralled, according to Imam, with the price of a kg of chicken surging by 450 per cent while that of local meat has jumped by 500 per cent. This comes on the back of a 186 per cent decline in the official exchange rate against the dollar.
Imam said that while the value of the minimum wage in Egyptian pounds had increased by 600 per cent, it had decreased in dollar terms from $168 to $122. He said that these figures confirm that the increases proposed by the law do not meet the needs of citizens and do not compensate for the continuous rise in the cost of living.
On a different note, the House also gave final approval to government-drafted amendments to the 2005 income tax law.
According to head of the House’s Budget Committee Mohamed Suleiman, the law represents a prominent piece of legislation as it is a continuation of the tax-reform policies initiated by the Finance Ministry and the Egyptian Tax Authority (ETA) through a package of amendments aimed at simplifying procedures, reducing administrative burdens, and stimulating local and foreign investments.
Kouchouk explained that the law aims to introduce amendments to a number of articles regulating the tax system, in order to simplify procedures and reduce administrative burdens, in addition to enhancing the investment climate and achieving greater fairness, as well as addressing problems related to securities, real estate transactions, and bad debts.
“In general, the amendments aim to achieve a balance between the rights of the public treasury and the requirements of economic development, as well as to enhance the business environment and improve the competitiveness of the Egyptian economy,” Kouchouk said.
The law, which includes seven articles, includes replacing a number of texts and adding new items to other articles with the aim of updating the tax treatment of various activities and financial transactions.
Article 3 of the law deals with provisions for companies that offer their shares on the stock exchange, while Article 4 deals with the mechanism for settling tax disputes. Article 5 stipulates waiving capital gains tax on listed shares in a step aimed at supporting the capital market and stimulating investment.
The law introduces substantial amendments to the real estate transactions tax, confirming that these will continue to be subject to a 2.5 per cent tax even if they are multiple as long as they are not based on profiteering activities.
The amendments also make real estate transactions between parents, children, and spouses exempt from tax.
One of the most prominent amendments is the exclusion of capital gains resulting from the disposal of securities listed on the stock exchange from being subject to income tax, in the light of the trend towards applying a proportional stamp tax as an alternative.
This should prevent double taxation and enhance the attractiveness of the capital market.
* A version of this article appears in print in the 2 July, 2026 edition of Al-Ahram Weekly
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