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Tuesday, 21 July 2020

Egypt settles EGP 6 bn in overdue export subsidies, earmarks another EGP 7 bn for current fiscal year

Gov’t disbursed EGP 6 bn in export subsidies last fiscal year, earmarks another EGP 7 bn for the new fiscal year: The Export Subsidy Fund doled out a total of EGP 6 bn in overdue export subsidies to 1,667 companies in FY2019-2020, according to a cabinet statement. The government has also earmarked another EGP 7 bn in its FY2020-2021 budget to pay off the arrears it has owed exporters since 2012.

Background: 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. The government had committed to doling out at least 30% of the arrears it owes to exporters this year, with each company receiving at least EGP 5 mn.

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