World Bank’s Egypt loan rests on VAT act approval

World Bank will transfer a loan to Egypt when the country’s parliament approve the new value-added tax act, namely VAT tax, said a government source with knowledge of the mater told Amwal Al Ghad on Sunday.

“World Bank’s cash transfer to Egypt is contingent on the parliament’s voice over the VAT tax.” said a first-hand official at the Ministry of International Cooperation who preferred to remain anonymous.

Egypt expects to receive the first $1 billion dollar tranche of $3 billion loan from the World Bank, when the House of Representatives votes for the economic reform programme, including the long-delayed VAT policy, Hafez Ghanem, World Bank’s Vice President for the Middle East and North Africa, told Reuters.

“The World Bank told Reuters in December that the first tranche was focused on “10 prior actions for policy and institutional reforms” already implemented. The second and third tranches are linked to additional reforms the government plans”, Reuters wrote.

In December 2015, the World Bank approved granting Egypt a three-year loan to support the state budget.