Cairo - Egypt will deduct 1% from people's
salaries for 12 months beginning on July 1 to offset the
economic repercussions of the coronavirus, according to a draft
law approved by the cabinet on Wednesday.
The tax will be imposed across all sectors of the economy in
both the public and private sectors for net monthly salaries
exceeding 2,000 Egyptian pounds ($127), the cabinet said in a
statement. A tax of 0.5% will be deducted from state pensions.
The measure comes as Egypt tries to deal with the economic
impact of the pandemic, which has brought tourism to a
standstill, triggered major capital flight, and threatened
remittances from Egyptians working overseas.
Revenues from the salary tax will be used to support
organisations and workers hit by the fallout from the virus, as
well as for direct support to some citizens and funding for the
medical sector, the cabinet said.
Those affected economically by the outbreak may be exempted
from the tax.
Egypt has confirmed more than 13,400 coronavirus cases,
including more than 650 deaths, and on Tuesday saw its biggest
rise in daily cases to date.
The government has received nearly $2.8 bln in emergency
financial support from the IMF to help close a balance of
payments gap caused by the coronavirus, and is in talks with the
fund over a standby loan.
GDP growth stood at 5% in January-March, down from a
forecast of 5.9%, the cabinet said. The government has forecast
that it will drop to about 1% in April-June.