Egypt's Finance Minister Mohamed Maait gestures during a news conference in Cairo in July 2019. Reuters
Egypt's Finance Minister Mohamed Maait gestures during a news conference in Cairo in July 2019. Reuters

Egypt to simplify tax in bid to woo foreign investors



Egypt hopes to boost feeble foreign direct investment (FDI) by automating and simplifying customs and tax processes, Finance Minister Mohamed Maait said on Monday, acknowledging that much still needed to be done.

Egypt is coming out of a three-year IMF-backed reform programme that helped stabilise the economy after a period of turmoil following a 2011 uprising, and growth rose to 5.6 per cent in the financial year that ended in June. But barring the oil sector, FDI has been falling.

"I have to be very honest. [There is] a lot of work we have to do in order to make us more attractive to foreign direct investment," Maait told Reuters in an interview on the sidelines of the Euromoney Egypt conference.

Along with devaluing the currency by half, introducing a value-added tax and slashing fuel subsidies, Egypt has also taken steps to tackle bureaucracy. Egyptians can now file their taxes electronically, which Maait called "a significant step".

Now the government is working on a bill to unify tax procedures, Maait said. "By the end of October, we will have the chance to issue the first draft to the business community, to civil society," he added.

"Just yesterday, I contracted a company to automate all these unified tax procedures." He said IBM and SAP secured the contract but did not disclose its value.

Changes to income tax would be procedural, and no changes would be made to overall tax policy or tax rates, he added.

Automated customs procedures are already in place at Cairo airport, Maait said, and are being developed at Port Said.

Maait credited the IMF-backed reforms with helping to lure foreign investors back to government treasuries, which had dropped last year due to emerging markets turbulence.

In April, Egypt signed an agreement with Euroclear, Europe's biggest settlement house for securities, to allow holders of its sovereign debt to clear transactions outside the country.

Maait said at the time that he expected domestic debt to become "euroclearable" in October.

"It is on track, but might not be next month," Maait said on Monday, adding that a legal change was needed to govern the process and he hoped it would be ready at the beginning of 2020.

Egypt would be Euroclear's 47th market, said Sudip Chatterjee, head of global capital markets at Euroclear.

Maait also said Egypt's long-delayed programme to sell stakes in state-owned enterprises would resume in the coming months, though he did not specify when.

"We strongly believe the private sector will be the main driver for this economy and for creating jobs," Maait said. "We have to do a lot to give them the confidence, and to make the environment for them easy to do business."

Euroclear's Chatterjee praised Egypt's reforms but said it needed to do more to develop smaller but "people-intensive" sectors such as tourism — a key source of foreign currency — and IT "where there is more job creation".

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Formula Middle East Calendar (Formula Regional and Formula 4)
Round 1: January 17-19, Yas Marina Circuit – Abu Dhabi
 
Round 2: January 22-23, Yas Marina Circuit – Abu Dhabi
 
Round 3: February 7-9, Dubai Autodrome – Dubai
 
Round 4: February 14-16, Yas Marina Circuit – Abu Dhabi
 
Round 5: February 25-27, Jeddah Corniche Circuit – Saudi Arabia
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PROVISIONAL FIXTURE LIST

Premier League

Wednesday, June 17 (Kick-offs uae times) Aston Villa v Sheffield United 9pm; Manchester City v Arsenal 11pm 

Friday, June 19 Norwich v Southampton 9pm; Tottenham v Manchester United 11pm  

Saturday, June 20 Watford v Leicester 3.30pm; Brighton v Arsenal 6pm; West Ham v Wolves 8.30pm; Bournemouth v Crystal Palace 10.45pm 

Sunday, June 21 Newcastle v Sheffield United 2pm; Aston Villa v Chelsea 7.30pm; Everton v Liverpool 10pm 

Monday, June 22 Manchester City v Burnley 11pm (Sky)

Tuesday, June 23 Southampton v Arsenal 9pm; Tottenham v West Ham 11.15pm 

Wednesday, June 24 Manchester United v Sheffield United 9pm; Newcastle v Aston Villa 9pm; Norwich v Everton 9pm; Liverpool v Crystal Palace 11.15pm

Thursday, June 25 Burnley v Watford 9pm; Leicester v Brighton 9pm; Chelsea v Manchester City 11.15pm; Wolves v Bournemouth 11.15pm

Sunday June 28 Aston Villa vs Wolves 3pm; Watford vs Southampton 7.30pm 

Monday June 29 Crystal Palace vs Burnley 11pm

Tuesday June 30 Brighton vs Manchester United 9pm; Sheffield United vs Tottenham 11.15pm 

Wednesday July 1 Bournemouth vs Newcastle 9pm; Everton vs Leicester 9pm; West Ham vs Chelsea 11.15pm

Thursday July 2 Arsenal vs Norwich 9pm; Manchester City vs Liverpool 11.15pm

 

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What is Financial Fair Play?
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There are a number of punishments, including fines, a loss of prize money or having to reduce squad size for European competition – as happened to PSG in 2014. There is even the threat of a competition ban, which could in theory lead to PSG’s suspension from the Uefa Champions League.

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