(MENAFN- Daily News Egypt) Former prime minister Ali Lotfy believes economic reform is important to bring Egypt out of its current crisis.
He added that such reform should be based on developing the tax system and rationalising public expenditure.
He said in a conference on Tuesday at the Sadat Academy that Egypt has no other alternative to get out of the financial crisis.
Regarding tax reforms, Lotfy believes the government needs a strong system to counter tax evasion, which reached EGP 40bn per year and EGP 60bn in tax arrears.
The Ministry of Finance has imposed a progressive tax on income on the new tax return at a rate of 22.5%, but Lotfy feels this is not enough and could increase in coming years.
Lotfy added that the non-application of tax between 2008 and 2014 means Egypt's budget has a missing EGP 40bn. As for the rationalisation of public spending, Lofty thinks eliminating subsidies is impossible, but it should reach those who deserve it. The best way to do so is by shifting to monetary subsidies rather than the current subsidies in kind. According to Lotfy, the government is obliged to determine who deserves subsidies.
The number of employees in the state's administrative body exceeds seven million employees, which Lofty thinks consume most of the budget. The government aims to bring budget deficit down to 10% this year.
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