CAIRO: Total tax arrears amounted to 69 billion EGP ($9.6 billion) during the current year, compared to a total of 74 billion EGP during the last fiscal year that ended June 30, Head of the Income Tax Authority Moustafa Abdel Kader announced late Thursday.
Around 15 billion EGP of the total arrears were collected, Abdel Kader said while having sohour (a pre-dawn meal during Ramadan) with reporters.
“The Income Tax Authority seeks to broaden the tax base through including the informal sector to the new system,” added Abdel Kader referring to street vendors and those running unlicensed projects.
This comes shortly after President Abdel Fatah al-Sisi issued a decree July 1 to amend some provisions of the Income Tax Law and Stamp Duty Law, amid efforts to revive Egypt’s limping economy.
Egypt’s economy faces “tough challenges that require united efforts to protect it and reinstate confidence in it,” according to the presidential statement.
“This amendment is aimed at redistributing the burdens of fiscal and economic reform on the widest possible tax base, excluding low-income people,” it read.
The expected total increase in tax revenues is estimated to be 10 billion EGP after the new adopted amendments to the taxation system, Abdel Kader to Al-Ahram early this week.
The Cabinet has approved a 10 percent tax on annual stock market capital gains on individual investors, cash dividends and bonus shares.
This tax elicited widespread criticism on grounds that it could reduce cash flow into the Egyptian Exchange (EGX).
Minister of Finance Hani Kadry previously announced he would amend the tax system by imposing progressive taxes, wealth taxes and real estate taxes as steps for covering the budget deficit and increasing Egypt’s tax revenues.
Few days before ending his term, former interim President Adly Mansour approved a 5 percent tax on annual incomes exceeding 1 million EGP ($142,000), effective for three years starting this year. The Ministry of Finance set the expected annual revenue from this temporary tax between 3 billion EGP to 3.5 billion EGP.