Al-Ahram Weekly | Economy

		Al-Ahram Weekly On-line 29 March - 4 April 2001 Issue No.527
Published in Cairo by AL-AHRAM established in 1875		Current issue \| Previous issue \| Site map

Taxation made easy
As a step towards extending more facilities to taxpayers, the Tax Authority is currently collecting sales taxes in specific Cairo neighbourhoods through the banking system instead of at the authority's sales tax collection bureaus.
A number of National Bank of Egypt (NBE) branches have been selected to provide this service in five Cairo districts on an experimental basis for the next six months. It is expected that the system will be applied on a wider scale after this trial period.
Meanwhile, the Tax Authority is studying new regulations meant to simplify the payment process including issuing tax forms that are less complex and more comprehensible to the average taxpayer. The regulations will be applied to a range of businesses including pharmacies and bakers; vendors of automotive spare parts, gold jewellery and textiles; and providers of heavy and light transportation.
"The aim is to build up long-absent confidence between the authority and taxpayers. The new regulations will attempt to apply the principles of justice and flexibility," said Talaat Hammam, head of the Tax Authority, at the Sixth Conference on Taxes last week, organised by the Egyptian Society for General Finance and Taxes. Taxpayers have long complained that taxation procedures were arbitrary and unjust.
According to Sayed Abdel-Mawla, professor of finance at Cairo University, tax revenues have been negatively affected by a five-year recession. "While the government continues to offer additional tax exemptions as an incentive to encourage businesses, it is obliged to carry out its plans for economic development," he said.
Tax experts argued that offering complete tax holidays for periods of 10 to 20 years is detrimental to the state budget. Instead, said Hassan Kamal, professor of taxation at Ain Shams University and chairman of the conference, granting temporary and partial tax breaks would be a better policy, as this would serve the interests of both business and the state.
Gas partnership
SHELL International Gas Ltd of Egypt has finalised an acquisition agreement by which it will obtain 18 per cent of NATGAS, which is owned by the Egypt Kuwait Holding Company (EK Holding). EK Holding is a public shareholding company with an authorised capital of $500 million formed by a group of Egyptian and Kuwaiti businessmen led by Nasser El-Kharafi. This company has extensive infrastructure operations in Egypt and is a major shareholder of NATGAS. Its transfer of 18 per cent of shares to Shell under this agreement fits in with its strategy of seeking partnerships with major international energy companies.
"The agreement signed between Shell and EK Holding underlines our policy of strengthening the domestic gas industry by inviting international companies to bring additional know-how and financial capabilities. It also demonstrates the attractiveness of our growing domestic gas business," said Minister of Petroleum Sameh Fahmi, who attended the signing of the agreement.
Egypt, which has 50 trillion cubic feet of confirmed natural gas reserves, is embarking on several projects for the export of this fuel.
NATGAS is an Egyptian joint stock company traded on the Egyptian Stock Exchange. Established in 1998, the company has been awarded a 20-year concession by the Egyptian General Petroleum Corporation (EGPC). Under this concession, it is to study, finance, design, build and operate a natural gas transportation and distribution network and market natural gas to residential, commercial and industrial customers on behalf of EGPC in Cairo, Giza, Alexandria and Beheira governorates in addition to the 6 October and Borg Al-Arab industrial zones.
Shell says that this agreement represents another step in its strategy to increase its presence in the region and to expand its energy retail business. "This is a great addition to our existing portfolio in Egypt comprising upstream exploration and production, oil products retailing and power generation. This makes us one of the largest foreign investors in the country," said Roger Patey, chairman of Shell Egypt.

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