At the end of June 2026, the House of Representatives approved a draft law amending some provisions of the Universal Health Insurance Law No. 2 of 2018. Under it, the solidarity contribution came to be treated as tax revenue, with the Egyptian Tax Authority examining, assessing and collecting it within the annual income tax return, on condition that its proceeds go to the State’s public treasury, and with the treasury obliged to automatically transfer an amount equal to the full proceeds to the General Authority for Universal Health Insurance.
The amendments included counting the value of the solidarity contribution among the deductible costs when calculating the income tax base, after it had been barred from being counted among tax-deductible expenses. According to the original law, the solidarity contribution amounts to 2.5 per thousand of the total annual revenues of sole proprietorships, companies and public economic authorities, and it is imposed on various commercial, industrial and service activities as one of the sources of sustainable financing for the universal health insurance system.
On the other hand, the amendments stirred controversy inside the House of Representatives, as MPs warned against undermining the independence of the authority’s resources and opening the door to using them for other purposes or delaying their transfer, amid parliamentary questions about how adequate the oversight guarantees are to ensure that the money reaches the body for which it is earmarked without delay.
In this regard, MP Diaa El-Din Dawoud warns against repealing the ninth clause of Article 40 of the Universal Health Insurance Law No. 2 of 2018, concerning the solidarity contribution, which used to be collected directly as revenue for the General Authority for Universal Health Insurance, and against turning this clause into general tax revenue whose proceeds enter the public revenues of the Ministry of Finance (the Tax Authority), to be made available later as allocations for the authority under Chapter Four of the general budget’s expenditures, which covers subsidies, grants and social benefits.
The MP affirms his rejection of those amendments, voicing his fear of a repeat of the scenario in which the government seized the money of the Social Insurance and Pensions Fund.
He considers that the solidarity contribution is the basis of the actuarial calculation for the sustainability of funding sources and the provision of the service to beneficiaries, calling for a guarantee that prevents the Ministry of Finance from reaching into the solidarity contribution funds.
MP Ahmed Farghaly, for his part, rejects the draft amending some provisions of the Income Tax Law linked to financing the universal health insurance system, considering that the amendments represent a change in the philosophy of financing the system by turning the proceeds of the solidarity contributions into tax revenues that go to the public treasury, instead of allocating them directly to the General Authority for Universal Health Insurance.
He explains that the Universal Health Insurance Law No. 2 of 2018 explicitly stipulated that the solidarity contribution, set at 2.5 per thousand, be allocated to financing the system and guaranteeing its sustainability, considering that subjecting these proceeds to the tax collection mechanism threatens the independence of the authority’s resources and contravenes the purpose for which it was imposed.
During parliament’s discussion of the draft law, the MP expressed his reservations about the guarantees the government offered regarding the transfer of the proceeds to the Universal Health Insurance Authority, stressing that he does not see in the amendments a sufficient legal obligation guaranteeing that the money is remitted in full and on time, and calling for clearer guarantees to protect the system’s resources.
He cited the experience of the social insurance funds, warning against a repeat of what he described as the Ministry of Finance’s seizure of those funds in earlier periods, and the negative effects this had on pensioners’ rights, considering that the same fears are being raised today regarding the universal health insurance funds.
He also criticised the performance of the Ministry of Finance in meeting its obligations towards the system, noting that, according to him, it has not paid its prescribed contribution for those unable to pay, in addition to bodies affiliated with it that have not paid their dues to health insurance, which leaves him unreassured about transferring the management of these resources to the Ministry of Finance.
He added that the government moved to amend the mechanism for collecting the contributions after the resources of the Universal Health Insurance Fund had accumulated, which he said had reached about EGP 242 billion, with expectations of annual proceeds of nearly EGP 52 billion, considering that this money should remain fully allocated to expanding the health insurance umbrella and improving the services provided to citizens.
He points out that the universal health insurance system still covers only about 6% of Egypt’s population, stressing that continuing to expand its application requires preserving the independence of its financial resources, the availability of sufficient cash reserves inside the fund to guarantee the sustainability of health service provision, and not directing this money to other purposes within the State’s general budget.
MP Mostafa Bakry agrees with them that the universal health insurance funds are not among the resources of general taxes, and that the solidarity contribution stipulated in the law was allocated to financing the health system and must therefore remain tied to this goal, demanding clear legal provisions obliging the transfer of the solidarity contribution proceeds to the General Authority for Universal Health Insurance immediately upon collection, and obliging the competent body to pay delay interest equivalent to the return on treasury bills in the event of a delay in transferring those funds.
During the discussion of the draft law, he revealed that the authority achieved financial surpluses of about EGP 15 billion during the period from 2022 to 2023, in addition to the State bearing about EGP 3.5 billion for treating those unable to pay, while the draft budget includes tax proceeds estimated at about EGP 175 billion.
In an attempt to reassure MPs about preserving the independence of the authority’s resources, the House of Representatives approved the proposal submitted by MP Rawya Mokhtar, deputy chair of the Manpower Committee, which stipulated that the proceeds go to the public treasury and be remitted immediately and in full to the universal health insurance system, in a way that achieves discipline in collection and preserves the system’s rights.
On the other hand, observers believe that the practical effect of the amendments will remain tied to the mechanisms for implementing them and the extent of the Ministry of Finance’s commitment to transferring the proceeds to the Universal Health Insurance Authority, in addition to the details that will be included in the executive regulations expected to be issued within 60 days of the draft law’s approval, which will set out the procedures governing collection, remittance and oversight.
The Amendments Contradict the Law’s Philosophy
In the same context, the amendments introduced to the Universal Health Insurance Law, especially those relating to subjecting the solidarity contributions to collection by the Ministry of Finance through the Tax Authority, raise fears about the future of the system’s financing and about guaranteeing that these resources are directed to the health sector, according to Mahmoud Fouad, head of the Right to Medicine Association, who points out that the House of Representatives’ discussions raised questions about the guarantees that protect the rights of contributors and beneficiaries and ensure that the money they pay is directed to improving the health services for which it was earmarked.
He explains that beneficiaries pay these contributions in order to obtain health care, not as general taxes, considering that transferring their proceeds to the public treasury opens the door to using them to finance other sectors according to budget priorities, in the absence of legal guarantees ensuring that they return in full to the Universal Health Insurance Fund.
He tells Zawia3: “The aim of the amendments is linked to an attempt to reduce the general budget deficit by absorbing resources that were earmarked for financing universal health insurance, which contradicts the philosophy of the law, which is based on earmarking independent and sustainable funding sources for the system.”
He adds: “There are previous experiences in which money earmarked for specific purposes was used to cover other financial needs, and we fear a repeat of that with the universal health insurance resources if they become part of the State’s public revenues.”
He points to the Ministry of Finance’s delay in paying the dues of health bodies, among them the Egyptian Unified Procurement Authority, considering that this has been reflected in the provision of medicines and medical supplies inside hospitals.
He believes that moving the universal health insurance resources to the Ministry of Finance may expose them to similar problems, affecting the system’s ability to meet its obligations towards beneficiaries, demanding clear and binding guarantees ensuring that this money is allocated to spending on health care, in order to protect the rights of the citizens who pay their contributions in return for obtaining treatment services, not to finance other items in the general budget.
Dr. Alaa Ghannam, head of the Right to Health Unit at the Egyptian Initiative for Personal Rights (EIPR), criticises the approval of the latest amendments to the Universal Health Insurance Law without sufficient public discussion, even though it touches one of the most important social protection files and requires broad participation by experts and stakeholders before any substantial amendments are introduced to it.
He affirms that the most prominent amendments concern the mechanism for collecting community contributions, as these fees used to be collected directly for the universal health insurance system, whereas the Ministry of Finance has become the body competent to collect them, on the grounds of avoiding double taxation, since they are considered fees of a tax nature.
He tells Zawia3: “Transferring the collection of these resources to the Ministry of Finance may be acceptable from an administrative point of view, especially with the contribution being calculated on profits instead of revenues, a proposal that was discussed when the law was being drafted,” stressing that these proceeds must be remitted in full to the Universal Health Insurance Fund without delay or deduction of collection expenses, and must not be merged into the State’s general budget, but must remain earmarked in an independent account to finance the system.
He points out that the current stage requires a focus on a number of priorities in the health sector, foremost among them guaranteeing the provision of insulin pumps for children with diabetes, as the essential treatment guaranteed by the laws and the constitutional right to health, calling for speeding up the activation of the fund dedicated to rare diseases in a way that guarantees the provision of treatment and care for patients.
He demands that an objective and transparent evaluation of the experience of applying universal health insurance in its first phase be carried out and published before expanding to the second phase, in a way that allows strengths and shortcomings to be identified and the lessons learned to be used to improve implementation in the coming governorates, considering that these files represent urgent priorities that should be worked on during the current period to ensure the success of the system and the achievement of its goals.
Calculating the Contribution on Revenues
Under the Universal Social Health Insurance Law No. 2 of 2018, the solidarity contribution was imposed on companies at a rate of 2.5 per thousand and calculated on total revenues, not on net profits, which drew objections from the business community, because companies were obliged to pay it whether they made profits or incurred losses, and it was also not considered among the deductible expenses when calculating tax, which Ashraf Abdel Ghani, head of the Egyptian Tax Experts Association, considered an additional burden on companies.
Although the latest amendments addressed part of this problem, as they allowed the solidarity contribution to be considered among the deductible expenses, easing the tax burden on companies, the head of the association expresses his reservations about the contribution continuing to be calculated on revenues rather than on net profits, which does not take into account the differing financial situations of companies.
Abdel Ghani believes that collecting the solidarity contribution funds through the Tax Authority is nothing new, as they were already paid with the tax returns and went to the Ministry of Finance before being transferred to the Universal Health Insurance Authority, but the Tax Authority previously had no direct legal mandate to follow up on their collection as part of the dues it oversees.
He tells Zawia3: “The amendment gave the Tax Authority the power to follow up on the collection of these amounts and include them within the collection procedures, which helps raise the efficiency of compliance in paying them, after their collection had faced difficulties due to the absence of a body directly responsible for following them up.”
He affirms that the responsibility for guaranteeing that this money is remitted to the Universal Health Insurance Authority lies with the oversight bodies, foremost among them the Central Auditing Organisation and the legislative authority represented by the House of Representatives and the Senate, to ensure that these resources are used for the purpose for which they were earmarked, namely financing the universal health insurance system.
He points out that the success of the amendments will depend not only on changing the collection mechanisms, but on the existence of an effective oversight system that guarantees that the contribution proceeds move in full to the Universal Health Insurance Authority, in a way that preserves the sustainability of the system’s financing and achieves the goals for which it was established.
For his part, economist Dr. Elhamy El-Merghany affirms that the Universal Social Health Insurance Law No. 2 of 2018 has not achieved its goals eight years after its issuance, as it is still applied in only six governorates, namely Port Said, Ismailia, Suez, South Sinai, Aswan and Luxor, while it has not extended to 21 other governorates, noting that the number of beneficiaries has reached only about 6.4 million citizens out of a total of 108.6 million people, that is, less than 6% of Egypt’s population.
He explains that the law created a wide system of funding sources, including fees imposed on cigarettes and tobacco products, tolls on highways, driving and vehicle licences, licensing fees for medical facilities, in addition to the solidarity contribution on the revenues of companies and establishments, a percentage of hospital revenues, as well as the stamp duty earmarked for the system. These are resources collected from all the governorates of the republic, whereas the actual benefit of the system is limited to a small number of governorates.
He tells Zawia3: “The Universal Health Insurance Authority achieved a cumulative financial surplus of about EGP 220.3 billion up to April 2026, while its total revenues reached EGP 281.3 billion, driven by rising investments and cash balances, and these figures reflect that the financial resources have not been directed to expanding the application of the system and increasing the number of beneficiaries.”
El-Merghany criticises the Ministry of Finance’s move to amend the law in a way that allows these fees to be included in the budget’s public revenues, considering that this contradicts the purpose for which they were imposed, namely financing the universal health insurance system.
He believes that the effort to direct this money to plugging the budget deficit, instead of completing health coverage, reflects, as he describes it, the system’s failure to achieve its primary goal of providing comprehensive social health insurance for all citizens.
While the government affirms that the amendments aim to unify collection procedures and raise their efficiency without undermining the rights of the universal health insurance system, experts and observers believe that their success will remain contingent on the extent of practical commitment to transferring the solidarity contribution proceeds in full and on time to the General Authority for Universal Health Insurance, and on the oversight and legal guarantees that the executive regulations will contain to prevent these resources from being used for purposes other than the one for which they were earmarked.
With the system still applied in a limited number of governorates, the biggest challenge lies not only in managing its financial resources, but in employing them to expand the umbrella of health coverage and guarantee the sustainability of its financing, in a way that achieves the goal for which the law was established, namely providing comprehensive health insurance for all citizens.
