IMF Egypt Review: Egypt’s revenues to skyrocket LE 1T in 4 years

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Tue, 26 Sep 2017 - 01:00 GMT

BY

Tue, 26 Sep 2017 - 01:00 GMT

 IMF- Bruno Sanchez-Andrade Nuño- via Flickr

IMF- Bruno Sanchez-Andrade Nuño- via Flickr

CAIRO – 26 September 2017: Egypt will witness a leap in its revenues at the end of the International Monetary Fund’s (IMF) Extended Fund Facility program as it is expected to record LE 1.715 trillion ($972 billion) in fiscal year 2021/22, compared to a revised figure of LE 752 billion in FY 2016/17.

As stated by the IMF in its staff report of their first review, published Tuesday, the tax revenues are shaping the biggest contribution in the revenue recovery as it is expected to nearly double to LE 1,183 trillion by FY 2021/22, compared to an expected tax revenue of LE 607 billion in the current fiscal year.

Over the near-term, the government revenues are expected to close at LE 752 billion, well less than the estimates put for the LE 979.4 billion in the current fiscal year, compared to LE 877.8 billion in the IMF’s previous estimates.

The tax revenues for the current fiscal year are expected to stand at LE 607 billion, up from LE 450 billion in the previous fiscal year, where property and income tax approximately increased to LE 262.8 billion from LE 257.1 billion in the previous forecasts.

As for subsidies, grants and social benefits, the IMF revealed the government’s commitment in that file as this item is expected to record LE 440.3 billion and LE 431.1 billion in the current and next fiscal years respectively, compared to LE 375.6 billion and LE 401.5 billion in the previous estimates.

The IMF stated that a significant progress has been made on structural reforms, appearing in energy subsidy reform, wage restraint, and the new VAT, which have all contributed to “reducing the fiscal deficit and helped free up space for social spending to support the poor,” said David Lipton, first deputy managing director and acting chair of the IMF.

Energy subsidies in the current fiscal year are expected to decline by 0.8 percent of the GDP of which 0.5 percent is a fuel subsidy reduction.

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