Minister of Finance, Mohamed Maait, shared that the new value-added tax (VAT) in foreign currency does not apply to imports, mitigating some importers’ concerns over the latest amendments to the tax law
During the first meeting of the Egyptian-Bahraini Governmental Committee for Commercial, Economic, Scientific, and Technological Cooperation, 15 joint cooperation initiatives and 13 MoUs were agreed upon
Maait explained that the bond issuances reflect the country’s ability to diversify financing sources and tools, despite global economic challenges resulting from geopolitical tensions, and its eagerness to expand its base of international investors
The finance minister pointed out the potential returns of Egypt tapping into India’s financial markets, adding that it would build upon the country’s success in issuing Samurai and Panda bonds earlier this year
The primary objective of this partnership is to implement health and educational projects.
Egypt, under this agreement, will actively encourage investors to establish joint projects in sectors that are of national importance
The government recently declared the relaunch of the zero-customs car import initiative for the second time, with the possibility of an additional 3-month extension
The minister met with delegates from the General Federation of Egyptian Chambers of Commerce (FEDCOC), and its president, Ahmed El Wakil
The recent issuance is Egypt’s second, having offered its inaugural Samurai bonds back in March 2022, also issuing bonds worth $500 million which was, at the time, approximately ¥60 million
This step comes with the aim of helping to increase foreign exchange flows, and providing a portion of the foreign financing required to cover the needs of the Egyptian economy, in addition to continuing to achieve a primary surplus and growth in tax revenues.
Maait emphasized Egypt’s keenness for continuous coordination with the International Monetary Fund to maximize avenues of mutual cooperation that help achieve development, financial, and economic objectives.
The ministry managed to secure the issuance at a competitively low pricing, offering a favorable annual return of 3.5% over a three-year period.
Maait highlighted the impact of the pandemic and geopolitical tensions led to hiking prices of commodities and services, which has – in tandem with the disruption of global supply chains – caused a strong inflationary wave that has raised living costs significantly
According to the finance minister, Egypt seeks to improve the ratio by expanding automated tax solutions, specifically targeting the integration of the informal economy into the formal economy
The minister said this in response to questions from representatives of rating institutions and international banks on the sidelines of the International Monetary Fund and World Bank meetings in Marrakesh.
Maait revealed that the new group of Panda bonds will be worth $500 million, but did not disclose further details on a set date
Moody’s latest report downgrades Egypt’s credit rating in local and foreign currencies from B3 to Caa1 with a stable outlook, which Maait stressed was based on external and internal challenges which have also negatively affected macroeconomic indicators globally
During his speech, Maait highlighted that the volume of Sukuk transactions had surpassed an impressive two trillion dollars, based on conservative international estimates
As one of the few countries to do so, Egypt engages directly in the oil derivatives market to lock in supplies, wrote Bloomberg
Maait explained that Egypt is working closely with the AIIB, a multilateral global bank, to establish cross-border developmental partnerships, primarily led by the private sector.