Daily News Egypt

Increase in stamp and tax collections in next budget: government source - Daily News Egypt

Advertising Area

Advertising Area

Increase in stamp and tax collections in next budget: government source

Recent increases reduce the budget deficit and contribute to the control of debt, but increase pressure on citizens, Hani Tawfek 

The government has raised its targeted taxes and fees for the next fiscal year, in order to boost revenues and reduce the deficit in the general budget.

The targeted taxes on international and domestic telecommunications services currently amount to EGP 11.1bn.

The increase could come at a cost for citizens through several basic services. Services would include contracting and consumption of gas, water, electricity, and telecommunication, a government source revealed. The increase was added in the new budget, currently under review by parliament.

The Ministry of Finance stated the government expects tax a revenue increase from this year’s EGP 433.3bn, to an estimated EGP 604bn in the next fiscal year.

The targeted increase in some taxes, duties, and fees will directly affect citizens. The government expects to collect taxes on salaries and wages of EGP 37.4bn compared to the EGP 36.4bn in the current budget.

Changes will hit trade professions tax as well, with an increase from EGP 1.4bn to about EGP 1.8bn in the next fiscal year.

Economic expert, Hani Tawfek, said the increases will put particular pressure on low-income citizens, who are still suffering the consequences of economic reforms that amplified an already previously troubling inflation.

Tawfek stressed the need to implement a comprehensive tax reform that contributes to increasing the taxpayer base, and pointed out that Egypt is still one of the countries collecting the lowest tax revenues, that are still less than 14% of GDP.

The government stands to collect EGP 701m in the next fiscal year, compared to the EGP 523m this year.

The Finance Ministry said its target is to collect EGP 3.9bn in property tax next year over the EGP 2.6bn this year.

The proceeds of the targeted property tax in the new fiscal year are divided to EGP 256m from the land tax compared to EGP 234m this year, in addition to EGP 3.7bn from building tax compared to EGP 2.4bn this year.

The government plans to diversify development fees, stating, “The government will consider some development fees for services that do not affect low-income people, especially car licenses, mobile phone use and some other types of licenses.”

Government increases will not stop there in the next fiscal year; roughly an increase of EGP 6bn to 8bn in the proceeds of development fees set to reach about EGP 11.4bn.

EGP 6bn from duties on cars, which are divided into EGP 3.9bn of development fees on motor vehicles compared to EGP 2.8bn this year, and EGP 1.7bn of development fees on new local or imported cars compared to EGP 1.5bn.

An increase of taxes and fees on local cars from EGP 256m to EGP 350m, in addition to the taxes on private cars of about EGP 48m compared to EGP 24m in the current fiscal year.

Increases on the proceeds of development fees on foreign travel tickets issued in local currency to EGP 850m compared to EGP 724m, casino tax of EGP 167m compared to EGP 146m and gambling winning income tax of EGP 38m.

The Ministry of Finance said it aims to increase development fees on passports to EGP 168m compared to EGP 133m in this year, and taxes on departure from the country to EGP 981m compared to EGP 954m in this year. Other fees on passports will also increase to EGP 220m, as well as fees on consular procedures of EGP 3.4bn compared to EGP 2.6bn.

The government plans to increase its revenue from dues on water, electricity, gas, and telephone subscriptions to EGP 763m compared to EGP 603m, while stamping dues on the consumption of gas and electricity will increase to EGP 1.3bn compared to EGP 998m.

In addition to the stamp dues on contracts of EGP 221m compared to EGP 124m, the stamp dues on business and banking editorials will reach EGP 3.7bn up from EGP 2.9bn in this year, while stamping of gambling and lottery will reach EGP 28m compared to EGP 27m this fiscal year.

The government also intends to increase the development fee for concerts and entertainment services held in hotels and public tourist shops to EGP 52m compared to EGP 43m.

Increase in proceeds of work permit fees will go EGP 320m up from EGP 185m this year.

The government is looking to increase its revenues from taxes on goods and services to EGP 291bn compared to EGP 201.2bn in the current fiscal year.

They include value-added tax (VAT) on local and imported goods worth EGP 135.7bn compared to EGP 83.9bn in this year, and VAT on services of EGP 42bn compared to EGP 33.7bn.

The government intends to collect EGP 9bn of hotel and tourism services tax compared to EGP 7.7bn, international and domestic telecommunications services by EGP 11.1bn compared to EGP 6.8bn, and operation services to EGP 16bn compared to EGP 13bn.

Among other taxes on goods, the government is targeting EGP 71m on sales of sugar up from EGP 63m in this fiscal year, and EGP 203m for soft drinks beverages compared to nothing this year.

It also targets taxes of EGP 645m on beer sales compared to EGP 621m, and EGP 17.8bn on petroleum products up from EGP 10.3bn.

In terms of domestic tobacco and smoke, the government aims to increase the tax revenues on its sales to EGP 54.5bn up from EGP 42.3bn, and imported tobacco by EGP 424m up from EGP 217m.

The government is targeting a tax on domestic alcohol sales of EGP 148m, and imported alcohol to EGP 4m up from EGP 2m in the current fiscal year.

The government also aims to increase its tax revenue on drug sales to EGP 746 up from EGP 703m and imported tea to EGP 135m up from EGP 78m.

Topics: budget stamp tax

Advertising Area

Breaking News

No current breaking news

Receive our daily newsletter