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Egypt

Government and institution measures in response to COVID-19.

Government and institution measures in response to COVID-19.

Return to homepage  |  Last updated: 30 September, 2020

General information

Egypt has announced a USD 6.4 billion stimulus package, extending credit repayments for SMEs and increasing the daily withdrawal limits for debit and credit cards. The Central Bank has also announced a rate cut of 3%.

Tax measures – Direct and Indirect

(e.g. payment deferrals, rate reductions…)

Click to see a comprehensive summary of jurisdictional tax measures and government reliefs in response to COVID-19.

Economic stimulus measures

(e.g. loans, moratorium on debt repayments…)

  • All spot transactions on the EGX will be exempt from stamp tax in Egypt. (no issued law) Till 16th May 2020.
  • The suspension of the agriculture holding tax is extended for more two years; (no issued law) The head of the Egyptian Tax Authority (ETA) has recently issued a regulation regarding the payment of the health insurance contribution, (which is amounting to 0.25% of total annual revenues of the enterprise). As per this regulation the taxpayer can now pay such contribution electronically via any of the banks that supports the ETA’s electronic payment system, through the ETA’s web portal. The taxpayer’s tax registration number is required to verify the taxpayer and confirm the settlement.
  • The ETA reduced the working hours to deal with the tax payers to be from 9:00 AM to 2:00 PM. Furthermore, as a further precautionary procedure, in the time being the employees of the ETA works on a rotational shift basis. The same working hours from 8 AM to 3 PM. Nowadays they work with full capacity. 
  • The tax authority is also allowing taxpayers the option of remitting tax payments either electronically or through bank check. As such, taxpayers will be exempt from the administrative fees usually associated with these types of payments, which is only being permitted during the period of submission of financial year 2019-2020 tax returns. As stated before.

A 3% cut in interest rates:

  • The Central bank of Egypt (“CBE”) has decided to cut down the credit and discount rate from 12.75% to 9.75%.

On 14 March, the government announced a USD 6.4 billion stimulus package.

Key measures taken

  • The reduction of natural gas and electricity prices to industries;
  • The central bank's allocation of 20 billion Egyptian pounds ($1.2bn) to support the country's stock exchange;
  • The increase of the daily withdrawal limits for credit and debit cards by the central bank;
  • The grant of an “immediate” financing for the import of key commodities.

Other measures and sources

Main sources of information

Recovery Plan Overview

  • Recovery plan : Egyptian stimulus policies
  • Budget : in the USD 6.13 billion package (EGP 100 billion, 1.8 percent of GDP)
  • Announcement : September 22nd 2020
  • Main orientations : Heath, Citizen and competitiveness.

Main measures

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.

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.

Sectors/Industries/Areas affected

  • 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.

Contact us

Tax: Khaled Balbaa – kbalbaa@kpmg.com
Legal: Hatem Salem – hsalem@kpmg.com