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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Conflict, drought, famine

Estimates of the number of deaths caused by the famine range from 400,000 to 1 million, according to a document prepared for the UK House of Lords in 2024.
It has been claimed that the policies of the Ethiopian government, which took control after deposing Emperor Haile Selassie in a military-led revolution in 1974, contributed to the scale of the famine.
Dr Miriam Bradley, senior lecturer in humanitarian studies at the University of Manchester, has argued that, by the early 1980s, “several government policies combined to cause, rather than prevent, a famine which lasted from 1983 to 1985. Mengistu’s government imposed Stalinist-model agricultural policies involving forced collectivisation and villagisation [relocation of communities into planned villages].
The West became aware of the catastrophe through a series of BBC News reports by journalist Michael Buerk in October 1984 describing a “biblical famine” and containing graphic images of thousands of people, including children, facing starvation.

Band Aid

Bob Geldof, singer with the Irish rock group The Boomtown Rats, formed Band Aid in response to the horrific images shown in the news broadcasts.
With Midge Ure of the band Ultravox, he wrote the hit charity single Do They Know it’s Christmas in December 1984, featuring a string of high-profile musicians.
Following the single’s success, the idea to stage a rock concert evolved.
Live Aid was a series of simultaneous concerts that took place at Wembley Stadium in London, John F Kennedy Stadium in Philadelphia, the US, and at various other venues across the world.
The combined event was broadcast to an estimated worldwide audience of 1.5 billion.

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Challenge Cup result:

1. UAE 3 faults
2. Ireland 9 faults
3. Brazil 11 faults
4. Spain 15 faults
5. Great Britain 17 faults
6. New Zealand 20 faults
7. Italy 26 faults

Earth under attack: Cosmic impacts throughout history

- 4.5 billion years ago: Mars-sized object smashes into the newly-formed Earth, creating debris that coalesces to form the Moon

- 66 million years ago: 10km-wide asteroid crashes into the Gulf of Mexico, wiping out over 70 per cent of living species – including the dinosaurs.

- 50,000 years ago: 50m-wide iron meteor crashes in Arizona with the violence of 10 megatonne hydrogen bomb, creating the famous 1.2km-wide Barringer Crater

- 1490: Meteor storm over Shansi Province, north-east China when large stones “fell like rain”, reportedly leading to thousands of deaths.

- 1908: 100-metre meteor from the Taurid Complex explodes near the Tunguska river in Siberia with the force of 1,000 Hiroshima-type bombs, devastating 2,000 square kilometres of forest.

- 1998: Comet Shoemaker-Levy 9 breaks apart and crashes into Jupiter in series of impacts that would have annihilated life on Earth.

-2013: 10,000-tonne meteor burns up over the southern Urals region of Russia, releasing a pressure blast and flash that left over 1600 people injured.

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