Egypt parliament approves E-Payments Act
LEGISLATION WATCH- The House of Representatives’ general assembly approved the E-Payments Act yesterday, Al Shorouk reports. The law drafted by the CBE makes it mandatory for government and private sector entities to make all payments to subsidiaries, suppliers, and contractors electronically. The bill also demands electronic payment for big-ticket items such as taxes and customs payments, as well as subscriptions to IPOs, investment funds, and share purchases. Violators will pay a penalty equivalent to 2-10% of the total payment, or up to EGP 1 mn.
What does this mean for business? We’ll know more in the coming months as the government works out the executive regulations to the act.
Background: The bill is part of the government’s plan to gradually transition towards a cashless, paperless economy. The cabinet had announced last year its intention to make all government transactions electronic by the start of this year, and the Finance Ministry announced last month it will make electronic payment of government fees for amounts exceeding EGP 500 mandatory by early May.
And speaking of the move to a cashless society: The move toward (electronic) cash payment of welfare benefits appears to be gathering steam. A widely picked-up piece by state-run news agency MENA quotes Supply Minister Ali El Moselhy as saying that people benefiting from his ministry’s bread subsidy program could soon be paid cash instead. El Moselhy noted that the strategy would not save the government money, but would allow it to better target the subsidy to those who need it most. The proposal would see bread produced under the subsidy program sold at market prices.