Egyptian President Abdel Fattah al-Sisi has instructed the government to increase the tax threshold by 50%, from 45,000 pounds to 60,000 pounds, for both public and private sector employees.
This move follows the government’s earlier adjustments, raising prices for services like electricity and metro tickets to address budget deficits.
As part of a social protection initiative, state workers will see a minimum monthly wage increase ranging from 1,000 to 1,200 pounds.
The goal is to ease the cost-of-living challenges in Egypt, where there are concerns about a potential currency devaluation.
Devaluation of the Egyptian pound
Economists predict a devaluation of the Egyptian pound in the first quarter of this year.
Notably, Egyptian billionaire Naguib Sawiris criticized the delay in implementing this anticipated devaluation.
The country’s fragile economy, impacted by the Gaza crisis, faces challenges from decreased tourism and reduced shipping through the Suez Canal, a significant source of foreign currency reserves.
The International Monetary Fund (IMF) announced an agreement with Egypt on essential policy elements for an economic reform program, signaling progress toward finalizing a $3 billion loan.
The agreement outlines commitments to adopting a flexible exchange rate system, reducing state involvement, and promoting private sector growth. However, disbursements are contingent on eight reviews, with the first and second reviews postponed due to a stable exchange rate.
IAN BYRON