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Tuesday, 17 September 2019

Egypt kicks off new export subsidy program, says overdue payments on the way

Gov’t kicks off EGP 6 bn export subsidy program, says more overdue payments on the way: The government has started implementing the EGP 6 bn new export subsidy framework and is taking more steps to settle the overdue payments promised by the Export Subsidy Fund since 2012, Finance Minister Mohamed Maait said at a presser yesterday, according to two cabinet statements (here and here). Around 1,000 small companies and exporters will be receiving their dues “immediately.”

Larger companies, meanwhile, will be encouraged to commit to new investments to speed up their payments. They will be given 10% of their arrears “on the spot,” and will be provided with several options to receive the remainder of their arrears. The options include writing off any taxes or customs owed to the government, investing in domestic manufacturing and getting in return priority treatment, and/or applying for industrial land at a discount through the government’s new online land allocation portal.

How much are we looking at? The Egyptian Businessmen’s Association estimated last year that the government could owe exporters EGP 9 bn. Others in the field have put the figure even higher. The Finance Ministry said earlier this week in the process of giving back EGP 800 mn thorough tax breaks, and added that EGP 2 bn are expected to be settled by other alternatives. This came after Minister Mohamed Maait said last week the ministry has already disbursed EGP 1.4 bn over the past few weeks.

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