LEGISLATION WATCH- Proposed changes to how banks are taxed get committee-level approval in the House: The House Planning and Budget Committee has given a nod to government-proposed amendments to the Income Tax Act that would change how banks and corporations account for income from investments in government debt, Al Mal reports. The House of Representatives began discussing the amendments yesterday, Finance Minister Mohamed Maait said, adding that the bill should be approved by parliament’s general assembly and make its way to President Abdel Fattah El Sisi for ratification this month. A contradictory report on Al Shorouk quoted Maait on Sunday as saying that the ministry is close to finalizing the amendments and will put it up for public discussion within the coming weeks.

Background: The Madbouly Cabinet had approved in November the amendments, which would require banks and corporations to split their books, separately accounting for income earned from holdings of government debt. Analysts initially said that the new accounting mechanism would result in a c.37% effective tax rate for a model bank, compared to a current 24%. Maait had also said last month that the amended tax treatment would also be applied to corporations, but suggested that, unlike banks, corporates could invest surplus liquidity in other instruments such as time deposits and thus sidestep the new treatment.