Protests in Sudan’s El Gezira against 100% trade tax increase

Merchants in El Hasahisa in El Gezira state kept their shops closed on Sunday morning, in protest against the increase of the annual trade taxes by 100 per cent.

A trader told Radio Dabanga from El Hasahisa that most of the shop owners kept their shops closed until noon.

He described the taxes increase, imposed by the federal government, as “excessive” and said that the traders will take “all legal steps to counter the decision”.

Crisis

At the end of 2017, the Sudanese government decided on a package of austerity measures in an attempt to address the huge gap in its finances.

Khartoum’s priorities did not change: more than 70 per cent of its spending is still allocated to the defence and security sectors, less than 10 per cent will be spent on health and education.

In addition to major tax increases, customs duties were raised by more than 200 per cent – which immediately affected the prices of most of the goods in early January. The government further decided to liberalise the flour market which lead to the doubling of the bread prices.

Because of a negative trade balance, Sudan is suffering from a severe hard currency crisis.

The indicative exchange rate of the Sudanese Pound against the US Dollar was devalued twice, in early January from nearly SDG 7 to SGD 18, and in early February to nearly SDG 30. Yet, the US Dollar rate in the parallel forex market which settled at SDG 30 in January began to rise again in February, and reached SDG 46 in mid-July.

The inflation rate rose to 63,86 per cent in June. Following new increases in the prices of food and other basic consumer goods in Sudan in mid-July, economic analysts began to warn for an imminent economic collapse.