IMF in Egypt for First Time Since 30 June

In its first visit to Egypt since 30 June uprising, an International Monetary Fund (IMF) delegation met with Finance Minister Ahmed Galal Wednesday evening, Al-Ahram’s Arabic website reported.

Galal was keen to continue discussions with the global lender over providing Egypt with the technical support to introduce the new Value-Added Tax (VAT), steering clear of ongoing negotiations over the IMF’s $4.8 billion loan.

In August, Egypt’s government considered replacing sales tax with VAT, as a backbone for financial discipline and social justice.

The delegation will stay for three days in Cairo to meet officials from the Egyptian Tax Authority (ETA) to discuss the VAT implementation criteria.

The Egyptian government is expecting an additional EGP 322 billion (roughly $46 billion) in tax revenues, as part of the 2013/2014 budget, an ETA official told Ahram Online in August.

The revenue boost is a 50 percent rise from revenues in the 2012/13 fiscal year, the ETA official added.

Galal previously asserted Egypt does not want a loan from the IMF, as the need for cash and credibility among international investors no longer exists, Al-Ahram’s Arabic website reported two weeks ago.

There have been two years of negotiations over a $4.8 billion loan without agreement between the two sides, mostly as a result of the reluctance of successive Egyptian governments to impose reforms that would squeeze living standards, such as the lifting of fuel subsidies and raising of taxes.

Source: Ahram Online