Introduction

In a move that reflects a new trend towards diversifying public financing tools, Egyptian President Abdel Fattah el-Sisi approved a proposal to issue “tax bonds” to be financed by taxpayers and financiers, with the value of these bonds to be deducted later from their future tax obligations, in exchange for a return described by the presidency as “good and appropriate.” This decision came during a meeting that included the Prime Minister and the Minister of Finance, during which the latest developments in the state’s financial and economic performance were reviewed, in addition to the position of hedging against fluctuations in global oil prices, as part of the Egyptian government’s efforts to reduce financing needs and reduce the public debt service bill.

Although this development may at first glance appear to be a purely financial matter, it carries with it extremely important legal, contractual, and tax dimensions, both for companies that will subscribe to these instruments and for individual financiers wishing to restructure their future tax obligations in a way that achieves the best possible return with the lowest degree of legal risk. In this context, the International Consultations Group for Training and Legal Services (ICG) presents this analytical reading of the new tool, explaining its mechanism of action, its potential advantages, and the legal considerations that financiers and investors should take into account, while reviewing the specialized legal services provided by the group in the field of taxes to help its clients make informed and legally safe decisions.