Minister of Finance Amr El-Garhy said that the ministry has finalised a simplified tax system (STS) that simplifies some aspects of tax affairs for small and medium enterprises (SMEs). El-Garhy added the STS allows the incorporation of small business taxpayers into the larger formal economic sector, through simplifying the procedures and legislations of their economic activity.
In a press statement, the minister said on Monday that the ministry aims to expand and update the database of taxpayers through a simplified accounting system, which will contribute to increasing the cash flow coming from the tax sector by16% towards the gross domestic product (GDP).
He pointed out that the new system contributes to reducing the budget deficit and public debt, as every 1% increase in the tax revenues offsets 1% of the budget deficit.
El-Garhy revealed that the ministry aims to increase tax revenues during the current fiscal year (FY) by 20% compared to last year.
This statement came during El-Garhy’s meeting with members of the door-knock mission organised annually by the American Chamber of Commerce in Egypt (AmCham).
He said that the ministry is also working on digitising and automating both the customs and real estate taxes systems, building on efforts of former ministers of finance. Procedures were drafted and electronic registration was settled along with issuing a national point of sale system (POS) in collaboration with the banking sector, El-Garhy revealed.
The minister further added that the government is regulating the subsidies record—lifting it has caused much hue and cry over the past two years—pointing out that the subsidies bill for FY 2017/2018 reached EGP 80bn.
The minister brought up the surge in foreign investment inflow to the Egyptian treasury, which has reached $20bn, showing a growing trust from foreign investors in the Egyptian economy and the country’s stability.
Finally, El-Garhy asserted that the ministry aims to reduce the external debt-to-GDP ratio from 41% in FY 2016-2017 to 35% by the end of this fiscal year and to shift the initial public budget deficit into a surplus.