Egyptian Economic News Thread

[xAbd0o]

Good point, it's a cultural thing as well, (although shops used to close at 8pm during abdel nasser's rule if I'm not mistaken)

Btw street lights stays on during daytime which is a waste, this government need to rather think about solving these problems using management techniques rather than foolish and un thoughtful orders.

[AbouKhaleel]

Originally Posted by egypt69

Omg AbouKhaleel even a decision like closing shops early, you won't even condemn that. Will you ever condemn anything the Morsi administration will do? Or are you going to continue blindly supporting and defending their every single move no matter what?

Huh?
The feasibility analysis for this was done waaaay before even the revolution.

Why do you have to put Morsi and the MB in everything?

[AbouKhaleel]

Originally Posted by egypt69

Not to mention that there are much higher priorities right now

Actually the decision is one part of trying to solve (or at least reduce) the energy problem in Egypt.
That's a huge priority.

[AbouKhaleel]

Originally Posted by Civilization01

AC uses more electricity than lights.

Yes but they're on during the day anyway. Shop owners still open shops in the morning in the summer, it's just that people don't come because they know it'll be open late.

Originally Posted by Civilization01

You might consider the weather moderate half the year but I am from an area thats right off the Tundra. Egypt in November is hot to me.

OK but most people find it pretty reasonble during those months. Especially in the winter (November is more like fall), I don't know of many places that has weather as pleasant as Egypt.

Originally Posted by Civilization01

No other Arab nation is calling for shops to close at 10pm. Why only Egypt?

Don't know and honestly I don't care. I'm looking at the Egyptian situation, which is different than other countries.

Originally Posted by Civilization01

Expecting 18 million people to go to bed at ten at night to save on electricity and police officer salaries is not exactly a reasonable demand of government.

Nobody said go to sleep at 10 pm! Do whatever you want after 10 but shops won't be open.

[AbouKhaleel]

Originally Posted by xAbd0o

Btw street lights stays on during daytime which is a waste, this government need to rather think about solving these problems using management techniques rather than foolish and un thoughtful orders.

Well I hope they fix the street light waste also. All these measures can be taken simultaneously.

[egypt69]

Originally Posted by AbouKhaleel

Actually the decision is one part of trying to solve (or at least reduce) the energy problem in Egypt.
That's a huge priority.

Well since logic can't convince you, we'll just have to wait and let you see yourself how more harmful than positive this decision will be. We'll come back in 6 months.

[Civilization01]

Originally Posted by egypt69

Well since logic can't convince you, we'll just have to wait and let you see yourself how more harmful than positive this decision will be. We'll come back in 6 months.

And before the Arab revolution westerners wondered why there were riots in response to idiotic intiatives such as this.

When visitors come to see my city they are bemused and taken back that our shops mostly close at 10pm. They consider it stone age before invention of fire.

[AbouKhaleel]

Originally Posted by Civilization01

When visitors come to see my city they are bemused and taken back that our shops mostly close at 10pm. They consider it stone age before invention of fire.

??
That's basically what happens everywhere in the world. I live in Vancouver (consistently rated as the most liveable city in the world.....debatable but true), you'd be hard-pressed finding a store which opens after 7, let alone 10.

Of course, there are exceptions, like pharmacies, restaurants, essential services etc. These exceptions are also accounted for in the rules for Egypt.

[Skyprince]

In many countries , road & infrastructure upgrading works are done largely at night when traffic is minimal. When human & vehicle traffic is high it can be hazardous to conduct them. And, the fact that Cairo is a huge & crowded metropolitan area doesn't help . Infrastructure development is vital.

I don't know the intensity of night shopping & dining in Egypt . How many Egyptians work at night shift and will be affected ? If businesses can wisely transfer night traffic into day traffic I don't see many people will lose jobs that easily.

[Civilization01]

Originally Posted by AbouKhaleel

??
That's basically what happens everywhere in the world. I live in Vancouver (consistently rated as the most liveable city in the world.....debatable but true), you'd be hard-pressed finding a store which opens after 7, let alone 10.

Of course, there are exceptions, like pharmacies, restaurants, essential services etc. These exceptions are also accounted for in the rules for Egypt.

Ah, well no need to visit Vancouver BC then. Boring!

[Azmat]

A small city like Vancouver is hardly comparable to a massive city like Cairo.

[Civilization01]

Originally Posted by Skyprince

In many countries , road & infrastructure upgrading works are done largely at night when traffic is minimal. When human & vehicle traffic is high it can be hazardous to conduct them. And, the fact that Cairo is a huge & crowded metropolitan area doesn't help . Infrastructure development is vital.

I don't know the intensity of night shopping & dining in Egypt . How many Egyptians work at night shift and will be affected ? If businesses can wisely transfer night traffic into day traffic I don't see many people will lose jobs that easily.

I'd be more concerned about the commercial drivers of trucks (lories). Now they are dangerous.

and yes lanes can be shut down. Problem is first how to pay for the infastructure. Next problem would be how to help Egyptians adjust to having road construction at night. It took decades for drivers to learn to drive with road construction at night here.

[egypt69]

Egypt's Morsi raises sales taxes, approves property taxes

President Morsi announces raft of changes to Egypt's tax structure - including sales-tax increases on several consumer goods, services - and amends laws regulating taxes on property


Egyptian President Mohamed Morsi, who holds legislative authority, announced sweeping increases in sales taxes and stamp duties on a wide range of consumer goods and services on Sunday and amended Egypt's income and property tax laws.
Income tax brackets were slightly modified, but the highest bracket was maintained at 25 per cent for annual incomes above LE10 million. The president also issued a law levying a 10 per cent tax on Initial Public Offerings (IPOs), company mergers and acquisitions.

The measures represent the implementation of an economic programme that Egypt has proposed to the International Monetary Fund (IMF) in order to be eligible for a $4.8 billion loan.

The measures are aimed at reducing public debt through increasing state revenue.

Morsi has already reduced subsidies on butane gas and electricity as part of a government austerity programme.

Among other products, sales taxes were increased on steel, cement, soft drinks beer and cigarettes.

Morsi also raised sales taxes on a variety of services, including mobile-phone services, air-conditioned transportation, and cleaning and security services, among others.

He also doubled stamp duties on bank facilities and loans. A new scheme for duties on advertising was also put in place, with the highest bracket standing at 25 per cent instead of the previous 15 per cent flat rate.

The new legislation also stiffens penalties for tax evasion.

As for the property tax law, the exemption level was raised from properties valued at LE500,000 to those worth LE2 million. This will become effective as of 1 July of next year. Single home owners are not exempted from the tax.

The law levies a 10 per cent tax on annual rent for properties with market values of LE2 million after deducting 30 per cent of this value for maintenance purposes.

The following is a brief summary of the new changes to Egypt's tax structure:

- Steel rebars used for construction will be subject to a 10 per cent sales tax.

- Taxes on alcoholic beer will be increased from 100 per cent (with a minimum of LE200 per 100 litres) to 200 per cent (with a minimum of LE400 per 100 litres).

- The single tax on cigarettes will be raised from LE1.35 to LE2 per pack for locally produced cigarettes and to LE2.50 for imported cigarettes.

- Taxes on shisha (water pipe) tobacco will be increased from 50 per cent to 150 per cent.

- Taxes on local and imported wines will be raised to 150 per cent from 100 per cent.

- Taxes on cooking oil will be set at 5 per cent of the sale value instead of set per-tonne levies.

- Taxes on mobile-phone calls will be increased from 15 to 18 per cent.

- New sales taxes will be levied on fertilisers, pesticides and soft drinks, among others.

Income taxes

Modifications to the income tax structure will also be implemented, effective Monday. The new Egyptian income tax structure will be as follows:

First segment (LE5000 or less): Exempted

Second segment (LE5000 – LE30,000): 10 per cent

Third segment (LE30,000 – LE45,000): 15 per cent

Fourth segment (LE45,000 – LE1 million): 20 per cent

Fifth segment (LE1 million or more): 25 per cent

http://english.ahram.org.eg/NewsCont...-property.aspx

If it will indeed raise revenues, then this is the probably the first Morsi decision that I support.

[egypt69]

Does this guy take back every decision he makes?

Morsi halts tax hikes, calls for dialogue

In a late night statement, the Egyptian President stops the implementation of tax increases announced Sunday afternoon

President Mohamed Morsi decided to halt his Sunday decisions of increasing tax burdens on the Egyptian people, and ordered the government to carry out a ‘societal dialogue’ on the measures before implementation.
In a statement issued on his official Facebook page at around 2 am on Monday, Morsi said he put on hold the measures that were made public Sunday afternoon of raising sales taxes on a wide range of consumer goods and services.

“[The President] does not accept that the Egyptian citizen carries any extra burdens without consent. His Excellency has decided to halt the [tax raising] decisions until the degree of public acceptance is made clear,” the statement read.

The measures represent the implementation of an economic programme that Egypt has proposed to the International Monetary Fund (IMF) in order to be eligible for a $4.8 billion loan. They are aimed at reducing public deficit through increasing state revenue.

Morsi has already reduced subsidies on butane gas and electricity as part of a government austerity programme.

Among other products, sales taxes were increased on steel, cement, soft drinks, beer and cigarettes as well as a variety of services, including mobile-phone services, air-conditioned transportation, and cleaning and security services.

Egypt has already secured a preliminary (staff-level) approval for the loan and the IMF board of directors is expected to approve the facility on 19 December.

The timing of the measures, less than a week before the 15 December scheduled referendum on the draft constitution, was seen as inappropriate by many observers given the public anger the new taxes were expected to summon.

For its part, the Muslim Brotherhood’s Freedom and Justice Party (FJP) issued a statement Sunday evening denouncing the President’s decisions and demanding to put them on hold.

“[The party] calls on the head of the government [Prime Minister Hisham Qandil] to halt these decisions until they are submitted to the People’s Assembly after its formation,” the statement added.

http://english.ahram.org.eg/News/60166.aspx

[MASRI]

So incompetent. A chaotic, disorderly decision-making process. And this is a president who claims he wants to attract foreign investments. It won't happen in this environment of incompetence.

[Wust El Balad]

The problem isn't about removing such tax . The problem might be around the inflation that will occur with such decision. Morsi is likely to raise tax once referendum held. Apparently, such decision could potentially raise everything up . As much people are struggling to work and feed their family, i don't know more what can happen.

Such decision is applied to all the firm in the country, strategically production rate could cost more and push the firm to raise the price of the market.
This decision might create the hunger revolution.

Plus, Egypt is crossing the red line. We might now talk of an economic collapse like Greece

[Azmat]

Welcome back Wust. The Greek economy collapsed because they were spending a lot of money and they were lax with taxes, Egypt spends a disproportionate amount of money on subsidies, it is Nasser's legacy and it is an incredibly incompetent way of dealing with hunger and poverty. Subsidies need to be cancelled completely gradually and the money that is saved needs to be invested in stimulating growth allowing the Egyptian economy to grow and more money to enter circulation. The Egyptians are not going to attain welfare if the Egyptian government pays for their food, it will only make them dependent on the state and it makes our entire economy incredibly vulnerable to soaring food prices. The only solution is to make the people richer and that's not going to happen if the state is running a 10% deficit and has to resort to begging from other nations and organizations so it can afford to import goods. Now if the Egyptians insist on going with socialism (although an incredibly stupid version of socialism) then the only solution is to tax the hell out of them. This tax reform is the only solution to the current state of our economy unless the government wants to cancel all the subsidies that are currently draining 50% of our budget.

[Wust El Balad]

I do agree with you but the real problem with Egypt is over the way to cover the difference between cutting subsidies and improving social life. The fact that we are raising taxes to cut subsidies can have massive impact quickly. Already food market rose dramatically since the revolution and now you are completely increasing the inflation rate with different taxes. The current budget system of the country has a dangerous deficit and cutting subsidiary would only reduce the nation debt over budget. It's untrue to say that cutting subsidies would potentially bring more investment.

It's all about reducing our budget deficit and at the same time investing in the national balance system to avoid bankruptcy over wheat financing, importing natural gas & more.

[hakz2007]

Egypt's foreign currency reserves at "critical" minimum level

CAIRO, Dec. 29 (Xinhua) -- Egypt's foreign currency reserves have fallen to a "critical" minimum level, the Central Bank of Egypt (CBE) warned on Saturday evening.

In a statement, the CBE also announced a new system of trading foreign currency through auctions to help preserve foreign fund reserves.

Read more

[Wust El Balad]

yep we r screwed