Egypt passes new tax law in bid for economic reform

Egyptian President Mohamed Morsi signed a new tax law on Tuesday, according to the Associated Press, describing the measure as one that will shift the burden on the poor to that of the nation's struggling small business sector. 

As for the nation's powerful and wealthy elite, the new law won't touch them, said AP. 

The move is part of a wider government effort to boost a stagnating Egyptian economy, which is on the brink of fiscal disaster after the nation tore through much of its reserves during political upheaval that led to the overthrow of longtime leader Hosni Mubarak two years ago. The country's foreign currency now amounts to only a third of its pre-2011 levels, said AP. 

The new law also comes as Morsi faces growing public protest, with demonstrations calling for new elections held throughout the nation as recently as Friday. Just last month, the Egyptian Center for Public Opinion Research said Morsi's approval ratings slid from 78 percent to 46 percent within his first 100 days in office, according to Ahram Online.

But the government is working on its image. Lawmakers passed the new tax law last week, and the government has also recently introduced subsidy reforms, Ahram Online reported on Tuesday. 

Trade Minister Bassem Ouda has vowed to crack down on the nation's flourishing black market trade, said he would improve the food products used in state subsidized products, and change the bread distribution program, said Ahram Online. 

"We want to enhance the service in quantity and quality so that it reaches those who deserve it, because the people of this country deserve this," supply minister spokesperson Nasser El-Farash told Ahram Online. 

Egypt also faces international pressure to reform as officials there hope to win a $4.8 loan from the International Monetary Fund (IMF). 

The IMF recently projected inflation levels there will reach 10.9 percent by the end of this fiscal year, its highest since 2010, according to Daily News Egypt.

It's unclear how much the new tax law, for example, will change all that. Economist Ahmed el-Sayyed el-Naggar told AP small businesses will now have to pay five percent more but the law changes nothing for the wealthy. 

Despite the urgency of Egypt's current economic situation, some think political forces are really driving such measures. 

"There is a populist side," anthropologist Hania Sholkamy of the American University in Cairo told Ahram Online. "We are approaching elections. You need to give people something."