The Finance Ministry has announced a plan to pay for approximately LE8.7 billion increases in public expenditure starting July.
Taxes on local and imported cigarettes will be raised; sales tax on cement will be set at 5 percent and at 8 percent on iron bars, according to the new plan. Those taxes and other charges will ensure revenues of around LE5.1 billion, according to a statement issued by the ministry.
Those procedures will be implemented after approval of the People’s Assembly, said the statement. The plan also includes issuing treasury bonds to raise the total revenue to LE3.5 billion to finance public expenditure.
Meanwhile, Finance Minister Youssef Boutros-Ghali said the government will provide a subsidy of around LE1.9 billion to bolster the supply of strategic crops. He added that the government has decided to allocate additional funds of LE600 million to revamp irrigation systems throughout Egypt.
The minister also uncovered that funds to the health sector have been increased, with a supplementary LE300 million to free medical service. Allocations to state-financed medical treatment has also been raised by 81 percent to pay off debts from previous years and cover new beneficiaries. He added that LE400 million have been earmarked for the second phase of a program to boost the salaries of physicians.
Another LE150 million have been allocated to youth centers and clubs, LE40 million to houses of worship, and LE150 million to raising the salaries of mosque imams.
In order to control public expenditure and reduce the budget deficit by one percent annually, Ghali said that a new performance evaluation system will be adopted to improve the efficiency of public expenditure and reduce waste, all while maintaining the same level of performance.
Boutros-Ghali further added that the ministry will use a different approach starting from next year to reveal male/female shares of budget allocations. He added that the total value of salaries disbursed to female workers in the health sector amounts to LE1.87 billion, compared to LE3.125 billion to male workers.
Boutos-Ghali said the gross budget deficit for the fiscal year 2010/2011 is not projected to exceed 8.4 percent of the gross domestic product. His ministry plans to reduce the deficit to 7.9 percent in the new fiscal year, he added.
Translated from the Arabic Edition.
