Anwal seizes Omar Effendi IT SEEMS that Omar Effendi's sale saga is about to end. The final report of the committee assessing and negotiating the bid offered by the Saudi Anwal group has approved the selling deal at an overall value of LE905 million. The committee said that after nine months of negotiations with Anwal, it succeeded in raising the offered bid from the initially offered LE504 million, in addition to successfully setting the condition that the Saudi group keep Omar Effendi's 6,000 employees. The decision is still to be approved by the Holding Company for Trade's general assembly. The offer includes LE200 million which will be paid for 1,200 workers in an early retirement package. This is in addition to LE200 million to be injected as investments in the company. The committee also binds Anwal to the condition not to sell Omar Effendi's prime located Abdel-Aziz branch which is considered to be a historic building. Omar Effendi is Egypt's oldest and largest department store, with 82 branches nationwide. Taxes reduced MINISTER of Finance Youssef Boutros Ghali is due to announce the executive regulations of the stamp duty law next week. This had been subject to a number of amendments introduced to the law and approved by the People's Assembly a few weeks ago. According to Ashraf El-Arabie, senior advisor to the minister on tax policies, the new amendments include major reductions in the tax imposed on different economic activities. The amendments are also meant to facilitate the interpretation of articles of the law, so as to encourage a positive investment climate in Egypt. "The executive regulations include a clear-cut interpretation of the different categories of the tax. They provide many facilities and advantages to investors and businessmen," said El-Arabie. He added that the latest amendments included only six articles of the main law, particularly those related to advertising, life insurance policies, loans and credit facilities. According to the latest modification of the stamp duty law, advertisements on papers, magazines and television will be charged a 15 per cent rate, instead of 36 per cent. The law has nevertheless not yet determined whether or not ads on satellite channels will be subject to taxation. On the credit and loan facilities, the present tax has been reduced to 0.002 instead of the much higher rate of one per cent. However, the credit facilities extended to clients in the presence of a safe financial cover such as deposits will no longer be tax-free, as the case was before the introduction of the latest amendments. The tax rate imposed on life insurance certificates has meanwhile become one per cent instead of three per cent. Insurance policies on other activities will be charged 10 per cent instead of 15, and in some cases 20 per cent. Despite the major changes introduced by the latest amendments to the stamp duty tax, the issue of imposing the tax on salaries of public servants was completely overlooked by the new modification to the law. (This category represents the main revenue of the tax, thus, it is inconceivable at the present time to abolish the tax on salaries of public servants, as the case is with private sector employees). Saudi soft loan MINISTER of International Cooperation Fayza Abul-Naga signed an agreement last week with vice-president of the Saudi Fund for Development Youssef bin Ibrahim Al-Bassam. The Saudi Fund will provide Egypt with soft loan estimated at 90 million Saudi riyals. Of this, a portion of 55 per cent will be a grant to be used to establish a grain- silos project. The latter project aims at developing an effective grains storage technique that will reduce loss and maintain quality. It also aims to help reduce government subsidies that are currently allocated for this purpose. This is part of a long- term plan which is made up of several phases, and which aims to build 50 silos in the different governorates. The approximate total costs will be LE290 million. Repayment of this loan will be over a 25-year period, five of which will be a grace period at an annual interest rate of two per cent. According to the Ministry of International Cooperation, the Saudi Fund's contributions towards Egypt's development plans since 1975 have cumulatively amounted to approximately 1.1 billion Saudi riyals. These were in the form of soft loans and were allocated for projects in transportation, agriculture, industry and education. Most prominent amongst those was the reopening of the Suez Canal in 1975 and its expansion in 1977. Other projects included the construction of the Sinai Desert Irrigation Canal, and the Cairo Assiut road in 1992. In 1999 the Fund allocated a $500 million grant in order to finance development projects managed by the Central Bank of Egypt. Future relations between the government and the fund were discussed. This was within the framework of defining a priority-based programme for financing development projects within the coming three years. These will include the modernisation of railways, ports and improving the population's social conditions.
