Fuel and commodity prices in light of hike and VAT increase dominate the debate
Fuel prices will not be rising again in FY2017-18, Finance Minister Amr El Garhy told Amr Adib on last night’s Kol Youm. The phase-out of energy subsidies will continue on its gradual trajectory for the next three-five years, El Garhy added, explaining that the most recent hike was necessary to remedy the budget deficit and pay up the oil and electricity ministries’ arrears.
On the budget, El Garhy said that he expects tax revenues — which increased during FY2016-17 to EGP 450 bn from EGP 350 bn a year before — to rise to EGP 600 mn during the current fiscal year (watch, runtime 20:25).
The value-added tax (VAT) alone reeled in an extra c. EGP 50 bn for the state in FY2016-17, Vice Minister of Finance Amr El Monayer told Lamees Al Hadidi on Hona Al Asema. El Monayer also defended the fuel price hikes, explaining to Lamees that the lower- and mid-income classes are protected by social safety measures and income tax breaks across the different brackets (watch, runtime 5:43)
Lamees also hosted business leader and MP Mohamed Elsewedy, who explained to the host that he doesn’t expect commodity prices to rise sharply in response to the fuel hikes, especially since the state did not hike natural gas prices for industry. Elsewedy will be meeting with Supply Minister Ali El Moselhy to discuss ways to avoid any drastic shift in prices (watch, runtime 49:40).
El Moselhy rang Lamees to confirm that the state will not be increasing the prices of subsidized commodities in response to the fuel hike and increase in the VAT, explaining that subsidy card holders will be privy to larger quantities of goods such as oil, rice, and sugar with their larger EGP 50 monthly allowance (watch, runtime 21 19).
The head of the National Telecommunications Regulatory Authority Mohamed Ibrahim also confirmed to Lamees that the price of prepaid mobile phone cards will not be increasing in response to the 1 bps increase in the VAT (watch, runtime 4:37).
Over on Yahduth fi Misr, Sherif Amer hosted head Suez Canal Economic Zone head Mohab Memish, who talked about the canal’s higher revenues in 2017, driven by higher traffic thanks to the new extension. Canal revenues are expected to double by 2023, Mamish said.