CAIRO: A report issued by the Ministry of Finance revealed that tax revenues on goods and services increased during the past 11 months of this fiscal year _ which ended last Wednesday by 4.6 percent to approximately 57.6 billion Egyptian pounds ($10 billion). The report also said there was an expected 7.2 percent budget deficit this fiscal year. The report pointed to a reduction in income taxes on company profits by 27.8 percent to 40.6 billion Egyptian pounds, while the revenue of property taxes increased more than three times the value during the same period last year, which amounted to 7.3 billion pounds compared to 2.1 billion pounds during the period from July to May of last fiscal year. Another report prepared by the ministry on the performance of the budget during the same period from July to May this year, attributed this increase in size of the property tax to the “increase in the tax on treasury bills and bonds, which are classified in property taxes since the beginning of the current fiscal year when the value of the tax collected each about 5.3 billion pounds.” The report added that the total public revenue and grants decreased by 18.8 percent during the period from July to May of 2009/2010, to reach 193 billion pounds compared to 237.7 billion pounds during the same period last year and attributed this to the decrease in non-tax revenues by 39.5 percent in addition to reduced tax revenues by 4.8 percent, “also lower dividends transferred to the Treasury of each of the Petroleum and the Suez Canal Authority and other economic bodies by 22.3 percent to 29.4 billion pounds compared to 37.8 billion pounds during the same from the previous year.” The report said that there is a decline in value of grants from foreign governments of 66 percent to 2.3 billion pounds by the end last May, compared to 6.6 billion pounds by the end May 2009. The report pointed out that the decline in public revenue and grants contributed to the “increase in the total budget deficit by about a percentage point, where the deficit of the budget amounted to 86.8 billion pounds at the end of May, representing 7.2 percent of GDP compared with 64.3 billion pounds during the same period of previous fiscal year.” The report showed that there is a slight dip in total public expenditure during the period from July to May of this fiscal year, registering a total public spending to 279.7 billion pounds, a decline of 6.3 percent, attributing this significant decline in expenditure on “subsidies, grants and social benefits,” which went down by 42.4 percent to record at 66 billion pounds. The report attributed the decline in spending on subsidies and social grants to the “marked reduction in the subsidy bill for some important goods by 28 percent to record 14.9 billion pounds and the declining support of petroleum products by 39.2 percent to record 33.7 billion pounds during the period July-May 2009/2010 and that in light of declining world prices for both fuel and food.” The report pointed out to an increase in the paid interests by 31.2 percent to a record 63 billion pounds. “Increased expenditure on procurement of goods and services rose 17 percent to a record 19.5 billion pounds,” the report stated. BM
