The government has backtracked on amendments to the draft law on investment guarantees and incentives that would allow oil refineries to join the free zones for a full tax exemption of ten years. This happened in a meeting of the Economic Commission yesterday with the managers of the refineries, whereby they agreed to a proposal by Ahmed Ezz, Chairman of the Plan and Budget Committee, to grant those companies all the benefits of the free zones, but with a partial tax exemption limited to the customs duties on the products that are exported to the Egyptian local market. The proposal will be attached to the bill.
The Ministries of Petroleum and Investment had insisted on granting full exemption for the oil refineries, especially when two such companies lost interest, and particularly as the world views Egypt as a promising center for energy. To this, Ahmed Ezz said that MIDOR getting raw material for non-subsidized prices does not mean exempting all the refineries under the free zone system. He also said that Egypt has a number of factors that can attract foreign investments without having to grant tax exemptions. He was against extending tax exemptions to companies that export most of their products, as this means Egypt would be subsidizing foreign countries. He stressed the point, on not exempting the refineries from Law 114 of 2008.