Egypt needs $11 billion to fund economic reforms: Finance minister

A shake-up of energy subsidies and the introduction of value added tax are among the proposals for Egypt's economy made in a new statement from financial officials

Egypt needs an infusion of $11 billion over the next two years to fund an ambitious economic reform programme that will restructure tax and energy subsidies, the country's finance minister said on Thursday.
In a statement issued by his ministry, Momtaz El-Saeed announced a wave of proposed reforms for the 2012/13 and 2013/14 financial years, including the introduction of value added tax, a shake-up of energy costs, and amending tax laws for real estate.
The proposals will be presented to Egypt's political parties and groups for discussion, El-Saeed's statement said.
The suggestion that Egypt's general sales tax be replaced by a value added tax (VAT) payable on luxury items has been made before -- with proponents including the International Monetary Fund (IMF) last January, just days before the country's uprising began.
Another mooted step is the reform of Egypt's energy subsidy structure, which critics say overcompensate industrial users and do not benefit the poor who most need protection from market prices.
The ministry's statement said new subsidies would "ensure access only to those who deserve [them]".
It also indicated the reforms would raise the number of Egyptian households receiving pensions from 1.5 million to 2 million households.
The ministry also repeated a pledge made last week to sell state land in Egypt to Egyptians living abroad in a bid to raise up to $15 billion in the next four years.
The finance ministry's statement came after a meeting in Cairo between Egyptian finance officials and the Delegation of the European Union to Egypt, headed by Bernardino León, the EU's special representative for the southern Mediterranean.
El-Saeed was also quoted as saying that talks with the IMF over a long-delayed $3.2 billion loan facility would "resume soon".