Arab Finance: Investors and experts in the field stressed Taxes To establish clear mechanisms for implementation Tax reforms Announced by the government, which is currently being conducted by a societal dialogue in Egypt from many sides to reach the best formula for these tax measures, which will stimulate investments, whether local or foreign, in Egypt, praising at the same time this government approach, which they said will contribute to supporting stability and economic growth and encouraging direct investment. .
The need to activate prior opinion
For his part, Adel Bakri, Secretary General of the Egyptian Tax Experts Association, said in exclusive statements to Arab Finance that the initiative launched by the government, which includes about 20 points related to tax reform, is characterized by positivity and will have a good impact on encouraging investment and attracting investors, whether local or foreign.
Bakri added that the most prominent of these points is the activation of the “prior opinion,” which is an article that has been in the law since 2005 but has not been activated. It relates to the right to obtain an opinion from the Tax Authority or the Tax Office on an unclear matter in the tax treatment of a new activity with a new investor such as the investor. Whoever comes to Egypt and conducts a feasibility study for a new project, for example, has the right to know how taxes will be dealt with in order to decide whether to complete his project based on this opinion or not? This point specifically relates to something that is not clear to the taxpayer with the Tax Authority, and this opinion, when obtained before establishing the project, is binding on the Tax Authority and the taxpayer at the same time, requiring clarification of clear mechanisms in this matter, such as the necessity of a quick response to the “prior opinion.” For example, the response should be within 30 days, giving the financier an opportunity to respond and submit documents that support his opinion, provided that this opinion is binding after the project is established.
Setting a maximum limit on tax penalties
The Secretary-General of the Egyptian Tax Experts Association confirmed that one of the most important points is also setting a maximum limit for tax fines so that the fine should not exceed the principal of the debt, which is an affirmation of an article in the general law that fines should not exceed the principal of the debt.
According to Bakri, the government also proposed the idea of “centralizing clearing” and activating the electronic system so that clearing can be done between different types of taxes. For example, if the taxpayer has money with the Tax Authority, he can pay it to government agencies such as the Ministry of Electricity and others, or pay it in any type of other taxes due. On the financier.
Bakri concludes his speech by saying that one of the good points in the tax reforms is providing tax facilities in tax accounting for those whose business volume does not exceed 15 million pounds, as they are considered small enterprises, which will encourage small and micro companies, noting that Article 3 of Law 30 of 2023 stipulates Tax facilities for those whose business volume does not exceed 10 million pounds, and it has increased to 15 million pounds in the government initiative for tax reform, which is a good thing, but it must be emphasized here that instructions must be directed by the Tax Authority to implement this through tax offices, because some of them may not work. With it.
Trust between funders and government
For her part, Shaima Aliba, a member of the Board of Directors of the Chamber of Engineering Industries at the Federation of Industries, believes that the recent government tax reform initiative will encourage investment in Egypt, and will also give confidence between the government, represented by the Tax Authority and the Ministry of Finance, and financiers, which will serve the economy in general and deepen more local industries in the country. Egypt and contributes to increasing the proportion of exports abroad, which increases the country’s foreign exchange and improves the economy.
Aliba, who is also the founder of the Help the Makers initiative to include the informal sector in the Chamber of Engineering Industries of the Federation of Egyptian Industries, added that tax reforms will contribute to the development of the economic situation and will encourage the inclusion of the informal sector – a large percentage of about 40% – in the tax system.
Aliba called for the necessity of coordination between the various parties to implement these tax reforms, while giving room to the private sector and encouraging it, whether they are local or foreign investors, by giving it the opportunity to invest in various fields.
Dr. Mostafa Madbouly, Prime Minister, had confirmed that the government would announce “revolutionary measures” in the field of tax reform, investment encouragement, and facilitation of investment and foreign trade procedures.
For his part, Ahmed Kouchouk, Minister of Finance, stressed that financial policies work to stimulate economic activity, production and export, and encourage the growth of the private sector in the Egyptian economy in competitive sectors such as renewable energy, information technology, and export activities. In a way that enhances the movement of comprehensive and sustainable growth and development within the framework of implementing the objectives of the government’s action program, which all aim to improve the lives of citizens, pointing out that the tax system will witness comprehensive development, the fruits of which the business community will feel on the ground, as an integrated package of tax reforms and facilitations is launched to contribute to Stimulating investment during the next short period, and there is also an integrated and flexible vision to deal with the tax challenges of the informal economy in a way that helps integrate and support it.
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