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Tuesday, 5 February 2019

Egypt’s House drafting more constitutional amendments to economic indicators

LEGISLATION WATCH- Could MPs’ newfound interest in constitutional change see less funding for health, education? The House Planning and Budgeting Committee appears to want to ride the coattails of constitutional amendments introduced earlier this week, Al Mal, saying MPs are drafting a second package of changes that could change how constitutionally mandated spending minimums on health, education and scientific research are calculated. The amendments would define spending minimums as “percentage of gross domestic product” (GDP) rather than “gross national product” (GNP), the newspaper says, citing remarks by committee chair Yasser Omar.

Why this matters: It could see less money flowing into healthcare, education and scientific research. Egypt’s GNP per capita (in PPP terms) was about USD 11.4k in 2017 while its GDP per capita (also in PPP terms) was about USD 10.5k the same year — implying the earmark would have gone down by about 8% in 2017 had the change been in effect then. GNP, also known as gross national income, “starts with GDP and adds residents' investment income from overseas investments, and subtracts foreign residents' investment income earned within a country.”

Other changes to budgeting, default tax system: The amendments would also change how the state budget is drafted (the piece doesn’t explain how) and define Egypt’s taxation system as following not a “progressive” model but an “optimal” one.

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