A new five-year plan was presented to the Egyptian government By the Union of Egyptian Industries, aiming to promote the country’s software sector by providing tax relief for IT products.
The plan, designed to raise the overall value of the Egyptian software industry from the current $50 million to two billion dollars, is expected receive support from Egyptian and international computer programming firms, according to Al-Bayan daily. The union’s study concludes that lowering custom duties on imports would boost Egypt’s software imports by $300 million in the first year, due to the decrease in cost of production.
The Union’s study also called on the Egyptian government to include the software industry as a main item in trade pacts signed between Egypt and the rest of the world. The study points out profit potential for the Egyptian software industry in consulting, software integration, localization and customization.
“Since the early nineties, many software development houses in Egypt shifted their business models from original software development to selling packaged solutions. The market today demands that packaged solutions of international software vendors be customized to address the needs of local companies and growing businesses,” commented Hala Rashid from Mustafa Shawki and Co, the second largest consultancy firm in Egypt.
The study advised that high taxation levels on IT imports is one of the major obstacles hampering the competitiveness of the Egyptian software industry, and a deterrent to investments in software research and development. The union called for a cut on import taxes from the current 25 percent down to three percent.
The union’s study estimates that 160 software development houses currently operate in Egypt, employing around 10,000 computer programmers. — (Mena Report)
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