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Sunday, 6 May 2018

House Budget Committee holds hearings with ministers on FY2018-19 budget

BUDGET WATCH- House Budget Committee holds hearings with ministers on FY2018-19 budget: The House of Representatives’ Budget Committee held a series of hearings on Saturday with cabinet ministers to discuss the FY2018-19 budget. Finance Minister Amr El Garhy spoke about his optimism on the state of the economy and the long term objectives of the economic reforms, which he says aims to achieve a sustainable growth of 6-7%. El Garhy reiterated some highlights of the budget, which included seeing state revenues grow to EGP 989 bn from EGP 813 bn. He sees tax revenues increasing to EGP 770 bn from EGP 620 bn, according to Al Mal.

New fees and taxes under the Universal Healthcare Act will be collected in FY2018-19: Perhaps the most interesting tidbit out of the sessions was the revelation that the new taxes imposed by the Universal Healthcare Act to pay for the system come into effect nationwide in the next fiscal year, according to statements by Budget Committee chair Hussein Eissa picked up by Al Mal. While he only names the EGP 0.75% sin tax all cigarette packs sold and the 10% tax on all other tobacco products, the law itself imposes taxes on the healthcare sector as well as the wider economy.

Paying for the healthcare system: Under the law, all companies, whether private or public and regardless of size, will have to pay a 0.0025% tax on revenues to help fund the system. Hospitals and clinics will pay a tax of EGP 1,000 for every bed they have. Healthcare sector operators will also have to pay between EGP 1,000 and EGP 15,000 in fees to become part of the health system. A 5% levy on hospital stays will also be imposed. The law imposes fees on issuing and renewing drivers licenses ranging from EGP 20 to EGP 300 and will direct a cut from highway tolls to the system.

Rady again noted that the new healthcare system will roll out in Port Said in July, with the state footing the bill for 4% of healthcare costs there, reports Ahram Gate.

Electricity subsidy cuts coming across the board: Electricity Minister Mohamed Shaker insisted that the 47% cut in electricity subsidies next fiscal year will see price rises hit all consumption tiers. His statement came in response to a suggestion by MPs that the lowest consumption tiers be exempted from the impact of the cuts. Industry will also be paying more, added Shaker, saying that prices for industry are cheaper than in many other countries. As we noted last month, the ministry is expected to raise prices 30-45% for everyone in July. Shaker also warned that those who do not pay for electricity next year will be cut off.

Shaker also noted that the ministry is planning to build 11 new power plants in FY2018-19.

Egypt will stop importing natural gas starting from next year, said Oil Minister Tarek El Molla at the hearings. He added that his ministry will focus on developing Egypt’s refining capacity over the next four years with an eye to reducing imports of fuel 30%, according to Al Mal.

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