Egypt is planning to increase tax revenues by 131 per cent in four years, state-owned MENA reported yesterday.
Speaking to the parliament, finance minister, Amr Al-Garhy said the government aims to increase tax revenues to 1.4 trillion Egyptian pounds ($78 billion) in the financial year 2021-22, compared to 604 billion pounds ($34 billion) during the current financial year 2017-18.
He pointed out that the state’s tax income for the financial year 2014-15 amounted to 300 billion pounds ($17 billion), adding that the government is targeting over 770 billion pounds ($43 billion) of tax revenues in the next financial year 2018-19. The government currently earns a total of 604 billion pounds ($34 billion) in tax income.
The government, Al-Garhy pointed out, is aiming to achieve a revenue of 1.4 trillion pounds ($78 billion) from taxes in 2022, while reducing the state budget deficit during the same year to less than four per cent of the total Gross Domestic Product (GDP).
Egypt’s financial year begins in early July and lasts until end of June of the following year.
The tax move is one of a series of measures taken by the government as part of President Abdel Fattah Al-Sisi’s severe economic reform programme and conditional loan agreements with the International Monetary Fund (IMF) and the World Bank.
Whilst the IMF praised the Egyptian government’s efforts last year, inflation reached 33 per cent in August, the country’s highest level since 1986. The country had also struggled with the devaluation of its currency to half its value for many months, after it was floated by the government in 2016. Finance authorities also introduced VAT for the first time, increasing the cost of countless goods; it simultaneously cut state subsidies on fuel, electricity and water.
The new state policies have added to the financial woes of many millions of Egyptians living below the poverty line, who have complained of being unable to afford basic necessities since prices hiked.