From bad reporting to good policy: Last week, Al Masry Al Youm inaccurately reported that central bank governor Tarek Amer had said he reached an agreement to give SMEs tax-exempt status. Turns out, what Amer was really suggesting a form of tax amnesty for SMEs owing back-taxes. Good idea. But looking back at it, we thought: Why not give a complete, time-limited income tax holiday to SMEs that opt to go legit and become part of the formal economy? We think the idea, if implemented fully, would be a stroke of brilliance from the government. As radical as it might sound, the idea would is not novel — it’s simply a use of tax incentives to improve the tax base.

It would create the most meaningful possible incentive for companies in the parallel economy to officially register — and would promote economic growth no matter how you cut it. Benefits for companies that join the formal economy would include access to finance (including the subsidized interest rate now available for SMEs), enforceable commercial contracts, access to future tax breaks and incentive packages, to raise their competitiveness, membership with trade union associations, access to government subsidies and incentives, and employer contributions to pensions for workers. The integration into the formal economy would also allow for assets that are held informally to be recognized, overcoming some of the challenges of dead capital.

And a time-limited tax holiday doesn’t need to apply only to informal businesses. Registered, tax-paying SMEs up to a certain size — and, by extension, the economy as a whole — would benefit from an income tax break. The government would get back its “abandoned” tax haul in large part through consumption taxes via the value-added tax and payroll taxes. Heck, they’d even get some it back through the tax on dividends, which we despise. Why? Because SMEs getting this windfall would, for the duration of the tax break, reinvest and spend the money, which would create more jobs and stimulate growth.

The result: More growth now and a larger tax base tomorrow. The exemption would also prepare the market for a gradual reintroduction of the income tax down the line, but this time, it would benefit from the larger number of companies that would have been integrated officially, as well as their larger sizes having benefitted from capital investment following periods of tax exemption. The overall quality of the tax base would improve down the line and the economy would get a bold, unequivocal investment incentive.

The idea isn’t that far-fetched — our freely admitted respect for the finance minister notwithstanding, we note that Amr El Garhy mentioned in passing at Euromoney yesterday that among the measures he’s mulling to promote financial inclusion is a strategy to ease the tax burden for SMEs. What say you, government readers?

President Abdel Fattah El Sisi has another busy day today in New York, where he’sattending meetings at the UN General Assembly. He’s scheduled to address the assembly today on regional politics and the war on terror. The President will also be joining a UN Security Council summit on peacekeeping and is making the crisis in Libya a signature issue, according to Asharq Al-Awsat. We have a full rundown on his meetings in New York yesterday in today’s Diplomacy + Foreign Trade section, below.

El Sisi will also be meeting with US President Donald Trump on Wednesday, while the delegation accompanying him will sit down with the president of the World Bank as well as a number of US investors.

A wave of US investments coming? A number of leading US corporations, including Mars and Uber have apparently pledged new investments and expansions in Egypt at a meeting with President El Sisi, Investment Minister Sahar Nasr told Kol Youm’s Amr Adib The interview also revealed that the executive regulations of the Investment Act will be issued in two weeks. You can catch the full details of the interview in Last Night’s Talk Shows.

The president also sat down for a working lunch with American Chamber ofCommerce and the US-Egypt Business Council, an official statement said. Discussion revolved around enhancing trade and attracting American investors to the Egypt. El Sisi discussed economic reforms and counterterrorism with the heads of various US lobbying groups and organizations yesterday at a roundtable discussion.

El Sisi also reportedly sat down for an interview with Fox News yesterday, according to the President’s schedule which ran in Ahram Online. The talk had yet to air as of dispatch time.

The Euromoney Egypt Conference 2017 wraps up today. Trade and Industry Minister Tarek Kabil is scheduled to attend early today, and yesterday saw Finance Minister Amr El Garhy and EGX boss Mohamed Farid address the audience. (We have more on El Garhy in Speed Round, below).

Reminder- We’re heading into a long Thursday-Saturday weekend in observance of the Islamic New Year.

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