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Sunday, 14 June 2020

Egypt settles c. EGP 3 bn in overdue exports subsidies in April, May

The Export Subsidy Fund doled out nearly EGP 3 bn in overdue export subsidies in April and May, bringing the total amount paid out in FY2019-2020 to EGP 5.2 bn, cabinet said in a statement.

A further EGP 1 bn will be disbursed this month to help exporters with liquidity through the covid-19 crisis and prevent layoffs, the statement reads, without specifying if the payments were made in cash. Payments of bns in overdue subsidies under an old framework have been moving forward since last September. Exporters are eligible for up to 40% in cash and can receive the remainder through either writing off taxes or customs or receiving industrial land at a discount. This arrangement was set in place in tandem with the launch of a new EGP 6 bn framework, which similarly promised a mixed model for payments.

Exporters want a return to an all-cash payout system: Industry lobbyists are looking to push for a return to the old framework that provided subsidies in cash as of FY2020-2021, Al Shorouk reports. A proposal will be handed to Trade Minister Nevine Gamea within 10 days, furniture export council head Ehab Diryas was quoted as saying. The new framework was supposed to be paying out fresh incentives this fiscal year, but has yet to do so, largely because of old subsidy promises that need to be settled. Investors have been complaining for months about bureaucratic hurdles, and a lack of clarity on how the government intends to apply the program in the first place.

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