Egypt to deduct 1% of state employees’ income for one year amid coronavirus crisis.
Egypt’s Prime Minister Mostafa Madbouly approved on Wednesday a draft law cutting the net monthly income all of state employees by 1 percent and pensioners’ net monthly income by 0.5 percent for one year as of 1 July.
Middle East correspondent, @TheEconomist Gregg Carlstrom tweeted;
The measure is meant to alleviate the economic consequences caused by the coronavirus pandemic, a statement by the cabinet said.
Under the new law, those whose net monthly income does not exceed EGP 2,000 are exempt from the deduction. The cabinet may also exempt those who work at the sectors negatively affected by the pandemic.
The deducted sums will be disbursed for the purposes specified by the cabinet to confront the repercussions of the outbreak, especially providing financial aid for the economic and production sectors, institutions, companies, and ventures impacted by the contagion.
The move also aims at disbursing financial and in-kind aid for individuals and families chosen by the president, in addition to financing medical research and developing the healthcare system.
The new law tasks the ministry of finance with establishing a special account at the Central Bank of Egypt (CBE), within the unified treasury account, to which the deducted sums will be deposited.
President Abdel-Fattah El-Sisi allocated in March EGP 100 billion to finance the comprehensive plan and the precautionary measures to stop the spread of the virus.
Since the outbreak hit Egypt in February, the state has introduced financial packages to facilitate and delay the repayment of loans, taxes and social insurance to maintain the economy and employment.
It has also launched an economic aid programme that includes three-month allowances for those with irregular employment.
Earlier this month, Madbouly said that the country has incurred great economic burdens, and that the government would take “tougher” measures if the infection rate rises.
Egypt registered 745 new coronavirus cases on Wednesday, bringing the total number of infections to 14229 nationwide.
The country also reported 21 fatalities, bringing the total number of deaths from the contagion to 680.
The Executive Board of the IMF approved Egypt’s request for emergency financial assistance of US$ 2.772 billion to meet the urgent balance of payments needs stemming from the outbreak of the COVID-19 pandemic.