The Egyptian parliament has approved a draft law imposing “financial development fees” on contracts related to the buying, selling, loaning or renewing the contracts of Egyptian or foreign athletes and coaches.
The new law states that a fee of 3 percent will be imposed on contracts lower than EGP 1 million, and 4.5 percent on contracts from EGP 1 to 2 million.
The law also states that a fee of 6 percent will be imposed on contracts worth EGP 2 to 3 million, 7.5 percent on contracts worth EGP 3 million to 5 million, and 9 percent on contracts worth more than EGP 5 million.
The committee also released a new article imposing a 10 percent tax on contracts worth more than EGP 10 million, and the games’ association will be responsible for collecting the newly imposed taxes and sending them to the tax authorities before registering the contracts, according to parliament’s statement.
Finance Minister Mohamed Maait told parliament’s budget and planning committee that the draft law comes out of necessity and aims to contain the disastrous impact of the international economic crisis caused by the spread of the coronavirus.
“Please know that a finance minister is not a magician and he does not have a magic wand to procure financial resources,” said Maait, adding that “we as a government have a lot of duties such as offering subsidized goods and spending on services, and in this respect, we seek to generate new financial resources as long as these will not be a new burden for ordinary citizens.”
Approximately 15% of the players in the Egyptian Premier League are foreigners while 6 of the 18 clubs are managed by foreign coaches. The new law will affect high profile foreign stars like Zamalek duo Ferjani Sassi (Tunisia) and Achraf Bencharki (Morocco), Al Ahly’s Nigerian striker Junior Ajayi, Al Ittihad’s Ugandan winger Emmanuel Okwi and Pyramid’s Ghanaian attacker Jon Antwi among others.
Egypt’s foreign reserves fell by $5.4 billion, or 9.7%, to $40.1 billion at the end of March, a Central Bank of Egypt statement said on April 7. The central bank ascribed the decline to what it described as “an unprecedented blow to the global financial markets arising from the coronavirus epidemic.
Egypt was expected to earn roughly $16 billion from tourism in 2020 prior to the coronavirus crisis, which has dealt a direct blow to the aviation and travel industries.
The Executive Board of the International Monetary Fund (IMF) yesterday approved Egypt’s request for emergency financial assistance of $ 2.772 billion to meet the urgent balance of payments needs stemming from the outbreak of the COVID-19 pandemic.
