Egypt’s Prime Minister, Mostafa Madbouly, announced a set of new tax incentives aimed at boosting investment and economic growth, while reaffirming the government’s commitment to not imposing additional taxes. This move forms part of the broader economic reform agenda designed to stimulate the country’s economy amid global uncertainties and regional challenges.
New Investment Incentives to Stimulate Growth
During a meeting with the heads of specialized parliamentary committees on November 7, 2024, Prime Minister Madbouly assured that Egypt’s government is focused on creating a more attractive environment for investment. By offering tax incentives, the government aims to encourage both local and foreign investments, particularly in sectors that are critical for the country’s long-term economic development. These measures are expected to provide relief to businesses, while also driving innovation and job creation across the economy.
No Plans for Tax Increases
Despite the fiscal pressures and regional challenges, Madbouly stressed that there are no plans for raising taxes in the near future. This statement comes in direct response to concerns about economic pressures on businesses and citizens. By maintaining a stable tax environment, the government hopes to foster investor confidence and stimulate economic activity without burdening the population.
Continued Commitment to Economic Reforms
Prime Minister Madbouly reiterated that the government remains fully committed to its ongoing economic reform agenda, despite the challenges posed by both local and global factors. He acknowledged the difficulties that come with such reforms but assured that they are essential for the country’s future prosperity.
A key component of the government’s strategy is the implementation of social protection measures designed to shield the most vulnerable segments of society from the negative impacts of economic reforms. These measures include targeted support for low-income groups, ensuring that economic progress benefits all Egyptians, not just the wealthier segments.
IMF Recognition of Egypt’s Efforts
Madbouly also highlighted the recent visit of Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF), who praised Egypt’s economic efforts. Georgieva acknowledged the unprecedented global challenges that governments around the world, particularly in the Middle East, are facing.
She commended Egypt’s collaboration with the Central Bank of Egypt, which has played a vital role in stabilizing the exchange rate and managing inflation. This partnership has been instrumental in ensuring that the country’s economic fundamentals remain solid in the face of global disruptions, such as fluctuating oil prices and regional instability.
Tackling Electricity Load Management
One of the major challenges the Egyptian government has faced is the increased demand for electricity, driven by large-scale developmental projects and population growth. Madbouly reported a 12% rise in electricity usage during the summer of 2024 compared to the previous year, largely due to these expanding projects. In response, the government has taken steps to improve electricity load management, working closely with the Central Bank to manage rising energy demands and ensure reliable power supply for critical infrastructure.
Focus on Public Services
Amid these economic reforms, Prime Minister Madbouly emphasized that the government’s priority remains on improving the delivery and quality of essential public services. This includes not only energy supply but also healthcare, education, and transportation. The government is committed to ensuring that economic growth translates into tangible benefits for everyday citizens, particularly as it tackles the current socio-economic challenges.
Egypt’s government is positioning itself to attract investment while maintaining fiscal discipline. By offering tax incentives rather than increases, the government hopes to strike a balance between stimulating economic growth and protecting citizens from additional financial burdens. As global uncertainties continue to shape economic prospects, Egypt is focusing on long-term stability through both reform and social protections, positioning itself as a resilient player in the global economy.
