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Al-Ahram Weekly 1 - 7 June 2000 Issue No. 484 
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Published in Cairo by AL-AHRAM established in 1875 |
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Al-Ahram Weekly 1 - 7 June 2000 Issue No. 484
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| Published in Cairo by AL-AHRAM established in 1875 |
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Egypt Region International Economy Opinion Culture Focus Features Heritage Travel Living Sports Profile People Time Out Chronicles Cartoons Letters A taxing question
By Sherine NasrTax laws are made to be evaded, runs the questionable maxim. And in Egypt, alas, it is not always the tax payers' fault. In fact, some laws appear to have been designed expressly to complicate, rather than regulate, commercial and industrial dealings. Among these is the Unified Tax on Income, issued in 1993 and criticised at the time by tax experts for not having been "discussed properly, but hastily ratified by the People's Assembly" according Hassan Kamal of Ain Shams University.
In their 12th annual conference, held in Cairo last week, members of the Egyptian Society for General Finance and Taxation, together with professors from several Egyptian universities, gathered to finalise the texts of 125 amendments they are proposing to law.
"Laws are enacted to regulate certain aspects of life for a particular period of time. They should be flexible enough to adapt to changes in the economic arena," said Rizk Ahmed Rizk, deputy chairman of the Egyptian Society for General Finance and Taxation.
High levels of taxation have undoubtedly inhibited domestic and overseas investors. Now, the government is facing a situation in which it is actively seeking to encourage personal savings and investments, which means coming up with an attractive tax package, while at the same time seeking to boost its tax revenues. Something of a double bind.
"Tax rates in Egypt are among the highest. They amount, in some instances, to 40 per cent on corporate profits, compared to 20 per cent in the US and many European countries," said Kamal. As a result, investments go to other countries in the region, where a more encouraging business environment is available.
"One possible option is to reduce tax rates to encourage people to invest, while at the same time broaden the tax base to maintain overall revenues," said Galal El-Sharqawi, a tax expert.
Over the past two years, there has been a marked move towards indirect taxation. In 1997, direct and indirect taxes each accounted for half of total tax revenues, while this year, indirect taxes are expected to contribute 54 per cent of total revenue.
