Stringent tax collections in Egypt comes to fruition as revenues for the first half of the 2012-2013 fiscal year grew 20 percent compared to the same period in 2012. According to the Egyptian Tax Authority (ETA), tax revenues during the period reached 98 billion Egyptian pounds, up from 79 billion Egyptian pounds collected in the period of the previous year.
ETA said the improved revenue collections are expected as companies file their tax payments in the coming months until April in view of the deadline for tax payments. Because of the government’s stiff tax collection efforts, companies and business owners have been prompt in paying their taxes to avoid penalties and other liabilities.
The rise in tax revenues also came with the impending tax hikes to be implemented by the government. Last December, Egypt’s President Mohamed Morsi signed a new decree that will hike taxes on a wide range of goods and services, such as cigarettes, soft drinks, oil, beer, cement, as well as mobile phone calls, water, and electricity. The new tax decree was aimed at drawing an additional 20 billion Egyptian pounds, of which, about 8 billion Egyptian pounds will come from sales tax on alcohols and cigarettes.
Morsi however suspended the implementation of the new tax decree “until the level of public acceptance is made clear.” He added that proper public consultations will be made prior to its full implementation. The government also assured that the new taxes will not cover basic commodities, such as staple foods.
Pending the implementation of the new tax increase, ETA has been working over time to expand the agency’s revenue collection measures and seal any tax leaks. The agency has been running after tax evaders and about 400 tax cases have been filed each month against individuals and corporations.
Meanwhile, the government has been offering services to those who have failed but are willing to pay their taxes. The ETA said the agency has imposed rebates of up to 15 percent to those who paid all their tax dues by end of December 2012. A 10 percent discount, however, will still be given until March 2013 to those who have back dues to pay.
About 60 percent of Egypt’s national budget is sourced from tax revenues.