Egypt Recovery Plan:
- The government has announced stimulus policies in the USD 6.13 billion package (EGP 100 billion) to mitigate the economic impact of COVID-19. and announced in May 2020 that 63 billion of the 100 billion had already been earmarked for coverage some urgent obligations relate to the following sectors:
Key measures – Health sector:
- To support the healthcare sector, EGP 8 billion has been allocated, targeted at providing urgent and necessary medical supplies, and disbursing bonuses for medical staff working in quarantine hospitals and labs. To support medical professionals, including doctors working in university hospitals, a 75 percent allowance over the wages has been announced.
Key measures – Citizen support facilities:
- A monthly cash subsidy of EGP 500 for affected workers for a period of 3 months (3 billion EGP)
- Issuing guarantees to provide additional financing for the purchase and provision of additional quantities of basic commodities (6 billion pounds)
- Increasing the tax exemption limit to 15,000 pounds annually.
- Introduce a reduced tax bracket of 2.5%
- Allocating EGP 50 billion for real estate financing for middle-income people.
- Adjusting the percentage of personal consumer loans to a maximum of 50% from total monthly income.
- A monthly cash subsidy of EGP 500 for affected workers for a period of 3 months (3 billion EGP).
Key measures – Central Bank:
- The central bank has reduced the policy rate by 300 bps.
- The preferential interest rate has been reduced from 10 percent to 8 percent on loans to tourism, industry, agriculture and construction sectors, as well as for housing for low-income and middle-class families.
- Postponing all credit entitlements to institutional and individual clients, which include consumer loans, real estate loans for personal housing and loans for medium and small companies, for a period of 6 months, with no additional returns and penalties applied for late payment.
- Limiting cash transactions and facilitating the use of electronic payment methods and tools, while eliminating fees and commissions applied at points of sale and withdrawals from ATMs and electronic wallets for a period of 6 months, while exempting local transfers in Egyptian pounds for a period of 3 months from all commissions and related expenses in order to reduce cash transactions Because it may carry a threat to public health at the present time.
Key measures – Industry sector:
- Reducing electricity tariffs for all industries by 9% from the current price (At an annual cost of EGP 4 billion).
- Cancelling and ending the delay due on industrial establishments until December 2019 for the petroleum sector, with a value of (EGP 5.3 billion).
- Providing additional allocations to contractors and suppliers (mostly private sector companies) operating and implementing government investment programs (10 billion pounds).
- Additional spending on public works programs (paving internal roads in villages, most of which are in Upper Egypt cities) (3 billion pounds).
Key measures – Exports sector:
- Paying 30% of the payments due owed to exporters, with a minimum of 5 million pounds, and paying the dues of the investment initiative, which connect the payment of exporters' dues in exchange for increasing their investments in the Arab Republic of Egypt (5.6 billion pounds in 2019/2020 and 7 billion in 2020/2021)
- 118 settlement agreements signed with exporters to settle their total over dues five years, with a total value of 10 billion, and 1.6 billion pounds were disbursed to exporters in 2019.
- Settlement of delay due through clearing with taxes and customs, which benefited 250 companies at a value of EGP 900 million.
- Egypt has also resumed the export of medical supplies, after a temporary halt in March 2020.
Key measures – Tourism and culture & Aviation sector:
- The Ministry of Finance issued a guarantee to public banks to provide a loan for tourism and hotel establishments with a value of (3 billion pounds).
- The loan will be at a low interest rate with a grace period of two years and a repayment period of 5 years.
- The Ministry of Finance provided a supportive loan to the Holding Company for EgyptAir with granting it a grace period of two years or upon achieving 75-80% of the operating rates achieved in 2019, whichever is closer (2 billion pounds).
Key measures – Tax sectors:
- Continuous verification of the safety and correctness of the implementation of the value-added tax law, and the preparation and application of the electronic invoice system, which matches with the start of the application of an electronic system to link the tax authority with all the parties selling goods or services by selecting certain companies to start using e-invoice from November 15, 2020.
- Electronic payment has been updated and modernize with varies and easy means such as Code QRA and Egyptian tax authority online tax portal.
- The suspension on the tax law on agricultural land has been extended for 2 years. The stamp duty on transactions and tax on dividends have been reduced.
- Capital gains tax has been postponed until 31 December 2021.
- A Corona tax of 1% on all public and private sector salaries and 0.5% on state pensions have been imposed, the proceeds of which are earmarked for sectors and SMEs most affected by the pandemic starting from August salary
- start the implementation of the unified tax procedures law for the Egyptian Tax Authority.
- Work to facilitate procedures for settling tax disputes with taxpayers, which contributes to increasing the proceeds of settlement delay taxes due.
- Work to subject e-commerce transactions to value added tax in accordance with international best practices.
- It comes on top of the important sectors that were affected by the challenge and contributed to the significant decline in rates growth in the tourism sector, the Suez Canal, aviation, Real estate, Construction, Healthcare and foreign direct and indirect investment And remittances from Egyptians from abroad.