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Sunday, 26 July 2020

Food exporters want to return to old subsidies framework

Food exporters want a return to old subsidies framework, with a few minor tweaks: The Food Export Council has sent a request to the Trade Ministry asking for a return to an old export subsidies program that paid exporters part of the value of the goods they export, council head Hani Berzi said, according to Al Shorouk. The government last year scrapped the old program in favor of a new arrangement that was supposed to be paying out arrears to exporters via a mixture of cash, tax relief and grants. The EGP 6 bn subsidies framework was expected to be paying out fresh incentives this fiscal year, but faced backlash from businesses due to a lack of clarity and because the government is still settling arrears owed under the old program.

What do food exporters want now? Under the new framework, exporters would receive 40% of their subsidies in cash, 30% in tax breaks and 30% in the form of grants to help them attend foreign exhibitions. Arguing that the tax breaks will only benefit habitually late taxpayers, the Food Export Council is lobbying to have the government rethink these allocations and instead pay out 70% in cash and 30% in exhibition support. In general, industry players want cash on the barrel head as was the case under the previous system.

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