Egypt's tax, prices hikes stun the nation, fuel concern of more discontent

Egyptians on Tuesday criticized fuel and cigarette price increases meant to fund a 30 percent hike in government salaries, worried the latest move by the authorities will once again leave them struggling to buy basic goods. It was also another sign of the troubles poor countries face from skyrocketing world food and fuel prices. In Egypt, 20 percent of the country's 76.5 million people live below the poverty line of about US$2 per day. Last week, President Hosni Mubarak ordered that the salaries of all government and public sector employees - almost 6 million people - be raised by 30 percent. His move appeared to temporarily assuage a population increasingly restive over stagnant wages and rising food prices. Then, parliament late Monday passed a bill to muster up the US$3.6 billion needed for the salary raises. It increased taxes and cigarette prices, reduced fuel subsidies and removed tax breaks from private education and heavy industry.