Monday, 27 March 2017
Government to increase spending on social security and welfare programs in upcoming fiscal year
The government will increase spending on social security and welfare in FY2017-18 bysetting aside a sum equivalent to 1% of the nation’s projected EGP 4 tn in GDP, said Finance Minister Amr El Garhy. This should come to around EGP 40 bn, he told President Abdel Fattah El Sisi and Prime Minister Sherif Ismail in a budget briefing yesterday, Al Ahram reports. Other key highlights on the budget, which is expected to be sent to the House of Representatives later this week, include:
- A budget deficit in the range of 9.2-9.5% of GDP next year;
- Welfare spending will be primarily directed towards cash and food subsidies as well as health care and education;
- Wages for civil servants will cost the state around EGP 240 bn next year, with no plans to slash them, according to House Budgeting Committee member Yasser Sheba;
- A 24% y-o-y increase in state revenues during the coming fiscal year, driven mostly by further tax reforms;
- State investments are set to increase 22% year-on-year to EGP 646 bn;
- The government had projected in its IMF agreement an exchange rate of EGP 13.3 to the USD, weakening the EGP from EGP 11.9 in the FY2016-17 budget, Al Mal reports.
El Garhy confirmed that there will be further changes coming to the Income Tax Act, Al Mal reports. These will include a new tax code for SMEs a mechanism of implementing any tax incentives ultimately specified by the Investment Act.