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Thursday, 1 December 2016

Supply Ministry raise subsidy spending as of 1 December

The government officially raised the monthly allowance on ration cards to EGP 21 from EGP 18 per person today, Al Borsa reports. Today also marks the beginning of the three-month Kramer snitching purge called for by Supply Minister Mohamed Ali El Sheikh, AMAY reports. The Kramer purge is now being touted as a cornerstone policy of the Ismail government’s reform agenda. New detail on the criteria for the new subsidy system was revealed by Ahram Gate on Tuesday: Egyptians earning less than EGP 2,500 per month would receive a full commodity ration provided by the government. Those earning less than EGP 3,500 would receive a 75% ration; individuals earning under EGP 4,500 would be eligible for 25% of the maximum subsidy; and food subsidies will be eliminated for those making more than EGP 4,500.

Peculiar is that Ahram Gate also claims the government is planning to move to a progressive tax system. Finance Minister Amr El Garhy poured cold water on that idea earlier this week when the cabinet econ team sat for an interview with Youm7, telling the newspaper that tax policy stability is more important than a new source of tax revenue. Even the House Economics Committee is split on the notion.

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