CAIRO: The Committee of Planning and Budget of the Egyptian Parliament agreed on Tuesday on increasing the provision of the draft general budget of the State for the financial year 2010/2011 to 7.474 billion Egyptian pounds ($1.33 billion), bringing the total public uses in the draft budget of 481 billion pounds to about 5.488 billion pounds. The Committee has proposed that measures increase through a number of resources including 3.524 billion pounds through loans and the issuance of securities other than shares, 2 billion increase in appropriations for grants, and 1.95 billion pounds in an increase in tax revenue that can come from the price of cement to a sales tax of 5 percent “instead of the current situation and imposing a tax on cement peremptory at 1.4 pounds per ton imported about 2.5 pounds per ton, for local production.” The Committee also agreed, under the chairmanship of Ahmed Ezz, Chairman of the Committee, on raising the taxes on cigarettes by 40 percent and molasses by 100 percent and “of the selling price to the consumer, in addition to the category of taxes ranging from 75 piasters per a pack and 125 piasters for packs whose selling price exceeds LE 3 for cigarettes, and increasing the tax on molasses packs from 50 percent to 100 percent.” The Committee had introduced amendments to the Income Tax Act No. 91 of 2005 to establish the obligation of all funders, from the owners of commercial and industrial businesses as well as the self-employed non-trade to issue invoices for amounts owed to them and the price of a commodity or in fees or commission, bonus or any other amount subject to tax, “with consideration each of those bills dose not evading taxes.” Ezz said that the local cigarette tax increase will not be affected, “but the increase will be for imported higher-priced cigarettes.” He pointed out that the outcome of the cigarette tax increase will be “directed for treatment at the expense of the state and the health sector in general.” Cigarette prices have gradually increased in recent years, with the government adding a number of hikes annually on the price of cigarettes. However, some are not convinced the new pricing will do much to give the government more funding due to corruption and the usurpation of public financing. Ahmed Yussif, a senior economist at a private firm, said that the government should focus on corruption first, “then they can think about putting the burden on the public.” BM
