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EBDA discusses amending proposed tax reforms - Daily News Egypt

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EBDA discusses amending proposed tax reforms

Egyptian Business Development Association suggested that the government should repeal clauses calling for decreased exemptions for projects run by Egypt’s Social Fund for Development and other non-profit organisations

By Ahmed Farahat

The Egyptian Business Development Association (EBDA), in a conference held 9 January, suggested that the government repeal recently proposed amendments to Egypt’s tax code, and present a new plan to the Shura Council. This new plan would seek the achievement of social justice and address problems with regards to the application of Egypt’s current tax law.

EBDA emphasised that it would be necessary to re-assess the proposed tax brackets and repeal all proposed amendments to Egypt’s sales tax that could have a negative effect on low-income citizens. This would all be done to help expedite the implementation of a new value added tax plan.

Towards the end of the conference, the Association highlighted the need to restructure the Egyptian Tax Authority (ETA) and convert it into an independent economic authority, run by an efficient, diverse board of directors that would help secure the confidence of financiers.

Those present at the conference suggested the activation of the Supreme Tax Council in accordance with article 139 of Egypt’s tax law to guarantee taxpayer rights and hold pertinent tax divisions accountable.

The association also pushed the ETA to reign in the activities of the country’s informal economy, granting tax officers judicial authority to make seizures, provide a means of protection for violators, and stiffen penalties for tax evaders.

It was also suggested that the government should repeal clauses calling for decreased exemptions for projects run by Egypt’s Social Fund for Development and other non-profit organisations.

The association also called for the repeal of clauses that distinguished between exemptions given to projects sponsored by the Social Fund for Development located inside and outside the Sinai Peninsula.

Hasan Malak, president of the association, emphasised the need to establish rules of engagement with regards to the creation of legislation and economic laws passed by the government in consultation with Egypt’s business community.

He added that the business community would “conduct a series of discussions regarding issues related to energy, tourism, vocational training, agriculture and industry.”

Ashraf Al-Arabi, previous president of the ETA, said that the government will seek throughout 2013 to “lower Egypt’s budget deficit by 8%, which would require an increase in tax revenue.” He said the revenues that would come from the new tax reforms would amount to EGP 35bn, which is he described as “insufficient” considering that the budget deficit is projected to reach EGP 200bn.

The ETA targets bringing in EGP 200bn in tax revenues throughout 2013, saying it could bring in anywhere between EGP 450bn and 500bn if some of its policies were changed or altered.

Al-Arabi added that imposing special taxes was unjustified considering that Egypt’s current tax code was created to promote social justice. Taxing wealth and resources he said, would not go far in helping to solve the nation’s budget problems.

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