Issuance of New Law to Face Economic Repercussions Resulting from Pandemics and Natural Disasters

Law no. 170 of 2020 in respect of the joint contribution to face some of the economic repercussions resulting from the spread of pandemics or natural disasters occurrence (the “Law”) has been issued. The said Law provides that 1% of the net income of the employees resulting from their work shall be deducted monthly and for a period of twelve months. Additionally, 0.5% of the net receivables from the pensions established in accordance with the Social Insurance Law shall be deducted as a contribution to face economic repercussions resulting from the spread of pandemics or the occurrence of natural disasters.

Employees working in the public and private sector shall be subject to the provisions of this Law.

It is permissible by a decision from the Cabinet, the proposal of the Minister of Finance and other competent Ministers, to exempt employees working in the economically affected sectors from this contribution whether in whole or in part.

It is also permissible to increase or shorten the deduction period mentioned above or to specify the period during which the deduction will be made in the future. It is not permissible to increase the total period of deduction for more than twelve months except after obtaining an approval from the House of Representatives.

The following employees shall be exempt from the deductions mentioned above:

1. Employees whose net monthly income does not exceed two thousand pounds.
2. Employees subject to pensions whose net monthly pension does not exceed two thousand pounds.

If you have any questions regarding any of the above, please contact:

Nadine Khaled
Senior Associate, Employment & Incentives – Egypt
n.khaled@tamimi.com