Egypt Cabinet approves budget savings for 2011/12

Egyptian Prime Minister Kamal El-Ganzouri approved LE20-22 billion in savings for the fiscal year 2011/2012 at a cabinet meeting on Monday, reported Al-Ahram newspaper.

Savings will include the application of a maximum wage that is 35 times the minimum wage – currently set at LE700 – for government and public sector employees.

There will also be new taxes imposed on imported cigarettes and tobacco.

According to Al-Ahram, El-Ganzouri approved several other decisions to help the poor and improve social equality.

The government postponed the implementation of a new property tax law from January 2012 for up to one year. It also postponed the implementation of a new social insurance and pension law until July 2013.

Another law being scrutinised for reform is Investment Law 8/1998 to make it easier for foreign investors to solve disputes, in a move designed to show Egypt is a safe place for investment.

In a further move to reassure investors, formerly state-owned land sold below its true market value will not be confiscated, however, the fee will be increased to reflect the true market value of the land.

A special allowance of 50 per cent of the monthly basic salary of administrative employees in the education sector, to be implemented in 2012, was accepted at the same meeting.