Egyptian President Mohamed Mursi has scraped a decision to increase taxes and asked the Cabinet to open “social dialogue” on the matter, two days ahead of mass rallies against to pretest a draft constitution he put for vote on Dec. 15.
On a Facebook post, Mursi announced putting on hold measures to raise sales taxes on a wide range of consumer goods such as cigarettes, soft drinks, oil, beer, cement and fertilizer, mobile calls and water.
“The president of republic, feeling the pulse of the Egyptian street, is aware of what the struggling Egyptian citizen bears of burdens,” the statement said.
“The President does not accept that the Egyptian citizen carries any extra burdens without consent. His Excellency has decided to halt the [tax raising] decisions until the degree of public acceptance is made clear,” the statement added.
The tax raise was part of a measures Egypt is required to take in order to increase state revenues and therefore be qualified for an International Monetary Fund (IMF) $4.8 billion loan.
The government has already began an austerity program by reducing subsidies on butane gas and electricity.
Mursi’s tax raise decision in a time of political turmoil stunned even the closest of his allies.
The Freedom and Justice party, the political arm of Mursi’s Muslim Brotherhood movement said in a statement that its “permanent position” was refusal of any economic policies that would increase the burden on low-income groups.