Egypt - President Abdel Fattah Al-Sisi has announced a package of incentives for industrial projects that aim to deepen national industry and target strategic sectors. The incentives include tax exemptions, land value recovery, and golden licenses for up to 10 years, depending on the performance and size of the projects.
The president directed the government to grant these incentives on Sunday, during his meeting with Prime Minister Mostafa Madbouly and Minister of Trade and Industry Nevine Gamea. He also stressed the importance of supporting small and medium enterprises (SMEs) and encouraging local production.
The incentives are expected to boost industrialization, reduce imports, and increase exports. Businessmen and industrialists welcomed the president’s decision and praised its positive impact on the sector.
Amr Fattouh, a member of the Egyptian Businessmen’s Association and Chairperson of Polyplast Group of Companies, said that the tax exemptions were among the most important recommendations made by the Industry Committee of Egyptian National Dialogue for import substitution. He added that the incentives would enhance the competitiveness of manufacturers and help them localize and deepen local industry.
Fattouh also called for identifying the industries that are not manufactured in Egypt and giving them all aspects of support. He further suggested granting tax exemptions to existing industries that export and bring dollar revenues to the state.
Taha Zidan, a member of the Federation of Egyptian Industries and a member of Lisco Sanitary Ware Company, said that the tax incentive package was the lifeline for the industry sector in light of the global inflation. He added that the incentives would lead to the recovery of the national industry and increase export rates. He also highlighted the achievements made by the Egyptian state in the sector during the last 10 years.
Zidan urged the government to issue decisions related to export support through export incentives, especially since some countries offer up to 27% in export subsidies. He also called for restructuring export incentives and studying the inclusion of old and existing factories in the tax incentive package.
Zidan also stressed the importance of the industry sector for the Egyptian economy, noting that it contributes more than 16% to the GDP, accounts for 85% of the non-oil commodity exports, and employs about 3.5 million workers, or 13% of the total workforce in Egypt. He said that the incentives would help achieve the state plan to increase industrial production from EGP 3.6trn to EGP 4.3trn in FY2024, and to EGP 5.74trn by the end of FY 2026.
Kamal El-Desouki, a member of the Federation of Egyptian Industries and chairperson of Rockal Al Alamia for Insulation, welcomed the new decisions and said that they were supportive of the productive sectors. He added that export growth should be based on supporting the industry with such directives, reducing financial burdens on factories, encouraging industries that can compete in global markets, attracting investments, and expanding local manufacturing.
He noted: “Working within the framework of a clear vision to support industry and increase exports would boost exports achieving unprecedented numbers. We must not rely on temporary increases linked to some problems of other countries competing with us in exports. We must work on reducing production costs, opening markets, deepening local manufacturing, and attracting investments. These are the four pillars of Egyptian export growth.”
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