Value-Added Tax: The Counter-Revolution’s Regime Exploits the Poor

Statement by the Revolutionary Socialists

The counter-revolution regime has imposed yet another burden on the poor and working class. After lifting the load off the wealthy by abolishing the wealth tax on incomes exceeding one million pounds, reducing the maximum income tax rate from 30% to just 22.5%, and freezing the stock market tax to appease investors and speculators, the regime is now compensating for lost revenues by imposing a value-added tax (VAT) on consumers. This tax will disproportionately harm people experiencing poverty.

The state has deliberately forfeited over 20 billion pounds in tax revenues by granting these breaks to the wealthy. Now, it plans to recover this shortfall from the pockets of people experiencing poverty. The new budget projects 32 billion pounds in revenue from VAT on consumers, replacing the funds lost to tax exemptions for the rich.

This injustice is just one in a series of harmful policies. The regime passed the Civil Service Law, stripping over six million public sector employees of their rights. It raised electricity bills by as much as 40%, froze wages in the new budget, and allowed real wages to collapse as inflation surged to 14.8% in June (annually). Now, it’s imposing additional costs on goods and services, driving up inflation yet again and further crushing the working and middle classes while continuing to grant tax exemptions and privileges to elite investors.

The introduction of VAT is part of a broader policy package agreed upon with the International Monetary Fund (IMF) to secure a loan. The burden of this loan will fall on people experiencing poverty and the working class for generations while investors reap the benefits of exemptions and incentives.
The regime, born out of the counter-revolution, is determined to erase everything achieved by the January Revolution. Each day, it grows more oppressive, crushing the livelihoods of people experiencing poverty and the working class while silencing dissent through militarized, authoritarian policies.

This approach is eerily reminiscent of Mubarak’s regime after its 1991 agreement with the IMF. However, today’s regime is implementing these policies far more aggressively. What Mubarak’s regime enacted over two decades—privatization, structural adjustment, rent hikes, and the eviction of farmers from leased lands—Sisi’s regime has accelerated, carrying out the harshest of these measures in just two years.
The daily suffering caused by these policies is fueling widespread anger and resistance. People are beginning to organize, refusing to pay inflated bills, and raising their voices against the regime’s relentless assaults. VAT is one of many hardships, with a looming currency devaluation threatening another price surge. Current living costs are already unbearable. Meanwhile, the labor movement shows signs of revival, especially in areas like the 10th of Ramadan City and Helwan, driven by skyrocketing living costs and deteriorating conditions.

Now more than ever, political parties, unions, student organizations, and other societal forces must step up and engage with an increasingly mobilized public. These groups must fulfill their roles in organizing, mobilizing, and supporting the public, who have already begun resisting the counter-revolutionary regime—a regime whose oppression surpasses that of its predecessors.