El-Sisi approves new tax-backed bonds to ease Egypt’s debt-servicing costs

President Abdel Fattah El-Sisi has approved a government proposal to issue “tax bonds,” the presidential spokesperson said in a statement Monday, as the government looks to curb public debt costs that have swelled sharply in recent years.

The bonds will be financed by taxpayers, with their value deducted from purchasers' future tax obligations, according to the statement. Bondholders will effectively pay off the securities through discounts on taxes owed down the line, in exchange for a return on the debt they hold.

The statement described the yield on the new bonds as “good and appropriate,” without providing further detail.

The finance ministry began issuing sovereign bonds denominated in local currency in 2025, debt instruments backed by state-owned land.

The government has also been courting small savers as an alternative source of public debt financing. It started selling citizen bonds in February, tax-exempt securities for individuals that carry a 17.75% annual yield paid out monthly.

The tax bonds will help "reduce financing needs and, in turn, the debt-servicing bill," the statement said.

Public debt interest costs have mounted in recent years as domestic interest rates rose to curb inflation. They stand at roughly 2.4 trillion Egyptian pounds ($45 billion) in the current fiscal year, about 47% of total state budget expenditure.