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Tuesday, 26 January 2021

House Planning Committee getting busy with tax, spending legislation

Importers of strategic commodities are a step closer to seeing VAT on shipping costs scrapped after the House Planning and Budgeting Committee yesterday approved amendments to the VAT Act. The changes would remove VAT paid on freight costs for strategic goods including legumes, grains, table salt, and spices. The changes were greenlit by the Madbouly Cabinet in November.

This isn’t the only VAT change in the pipeline: Other amendments, which received cabinet approval in October, would end VAT exemptions for products including crackers and sweet pastries as well as commercial and administrative real estate. It’s not clear when the committee will discuss these changes.

Exempting eurobonds, Tahya Misr from fees and taxes: The committee gave a nod to a bill to exempt capital gains made from trading government treasuries that were sold on international debt markets from fees and taxes, Al Shorouk reported. State-controlled Tahya Misr Fund would also be tax-exempt from taxes and fees on gains it makes or loans and credit lines it takes out under another bill that earned committee-level approval, according to the newspaper.

Also approved by the committee: A EGP 2 bn overdraft for the FY2020-2021 state budget to help finance measures to prop up the economy and certain sectors amid the fallout from the pandemic which was approved by cabinet last week.

IN THE PIPELINE-

A new pension fund for day laborers? A joint parliamentary committee will consider a draft social security bill that would establish a fund to pay out ins. and provide pensions for informal laborers, Masrawy reports. The proposals, which were referred to the committee by the House speaker yesterday, would see workers over 65 years’ old receive a pension — provided they pay in for 10 years — and ins coverage.

The government has stepped up its support for informal workers in light of covid-19’s effect on the economy, the government has spent EGP 1.5 bn on a series of EGP 500 stipends for day laborers, which were introduced last March but have been extended into this year. Rather than an emergency handout, this bill could act as a parallel pension system, providing long term social security to those employed in the informal economy, an estimated 30% of all labor in Egypt.

Helping out nonprofit hospitals: Non-profit private hospitals (including the 57357 children’s cancer hospital) could see their utility bills slashed by 75% under a law proposed by House Rep. Ayman Abouel Ela yesterday.

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