Reforming wages and taxes
A ROADMAP for wage reform is scheduled to be announced on Labour Day next month, said Samir Radwan, minister of finance this week. He said that discussions of wage reform had in the past been reduced to talk about minimum wage whereas that should not be the case. "Only 3.2 per cent of the labour force takes the minimum wage," he said. The Egyptian government is currently resorting to the International Labour Organisation to help it formulate a new wage policy. "Disentangling the wage chaos needs time," Radwan said. The roadmap will tackle the issue of tying wages to the actual cost of living, sources to finance the budget allocations for higher wages and the means to link the wage to productivity.
Radwan also said that his ministry will study the need for a comprehensive tax reform with the aim of mobilising more tax revenues as well as achieving social justice. "To achieve these goals, the issue must be carefully studied. It is worth noting that the tax system in Egypt underwent an overall reform policy in 2005, a step which helped contribute progressively increasing tax revenues ever since.
Radwan had said that Egypt's budget for the fiscal year ending June 2011 will suffer a deficit of $2 billion. And he projected an $8 billion in deficit the following fiscal year.
Steel and cement
THE CHAMBER of construction materials is considering the application of an obligatory price for steel and cement to prevent monopoly acts. Some producing companies raised the prices of steel and cement after the 25 January Revolution to compensate the shortage of demand in the markets.
A memo issued by the chamber explained that the profits achieved by the companies are exceeding the product's cost price, so the chamber, in cooperation with the Ministry of Industry and Foreign Trade, should interfere to prevent applying some monopoly acts in the markets. The current price of local steel is LE4,500 per tonne, while cement stands at LE550 per tonne.
THE MINISTRY of Finance continues to study compensation requests for enterprises and cars which were damaged during the events of the 25 January Revolution. The total number of applications applied to the ministry is 7,200. A committee is formed by members from the Ministry of Finance and Misr Insurance company ended the evaluation process of 1,100 cases which are expected soon to receive their compensation cheques. Two weeks ago, the first phase which included 300 people received their payments. Priority is given to small enterprises to help them start work again. The Ministry of Finance announced that, as of 24 March, the door was closed to receive further applications, and that one more phase dealing with the current cases may be announced later.
WITHIN the framework of a programme initiated by the Ministry of Planning and International Cooperation to shift part of Egyptian debts to Italy to finance local development projects, Fayza Abul-Naga, minister of planning and international cooperation, signed with Claudio Pacifico, the Italian Ambassador to Cairo, this week a programme to use LE37 million of Egypt's debts to Italy in financing some projects. These include a handicraft project for women to help them earn their living in South Egypt, in cooperation with the Ministry of Agriculture, with total fund estimated at LE23 million, in addition to LE6 million to finance a comprehensive project for immigration information to help Egyptian labour cope with the market needs. Another project discussed is for recycling plastic, glass and paper in Qalioubiya governorate, and needs LE2.5 million. The next phase for the Egypt and Italy debts programme is to finance a project to distribute meals for children in schools in Qalioubiya.