A good tax yield is expected despite last year's financial woes, Sherine Nasr reports
Taxpayers are always last minute folks. The deadline for submitting tax returns for corporate entities was 30 April. No wonder work in tax offices across the country extended to 10pm during the last week of April to receive herds of taxpayers who decided to hold off until the final moment. The deadline for tax returns by natural people ended 31 March.
Such has been the norm for years now. The good news, however, is that although 2009 was a difficult year for most companies and businesses, there are strong indicators that this is going to be a successful tax year with an increase in the number of tax returns submitted as well as the total revenue gathered.
Although a final statement has not yet been issued by the Egyptian Tax Authority (ETA), Ahmed Refaat, head of the authority, underlined in a press conference held earlier that preliminary indicators assure that there is at least a 14 per cent increase in the number of tax returns by natural people this year compared to last year, while an approximate 20 per cent increase in income taxes is also expected.
"This is a direct result of the continuous work by robust tax collectors, the growing confidence on the part of taxpayers, and the stable tax system that has been implemented during the past five years," said Refaat, adding that greater attention has been given this year to settling problems related to the pharmaceutical sector and to lay the foundation of simple accounting rules for small and medium sized enterprises (SMEs) so they can submit simple tax returns and eliminate disputes in the taxpaying community.
This year also marks the beginning of the full automation of the tax system. Tax returns and payments can now be delivered automatically through any branch of a number of banks that provide the service, including the National Bank of Egypt, Banque du Caire, Banque Misr, BNP Paribas Bank, and Crédit Agricole among others.
Meanwhile, ETA is in the process of providing major accounting offices with smart cards to store their clients' e-signatures, in addition to other tax-related data. The authority also provides software programmes to help clients save and retrieve data on tax returns, to calculate income, sales and salary taxes, and reductions, etc.
"Executives in these companies will receive training on how to best use these programmes in the training centre affiliated to the tax authority," said Fathi Abdel Aziz, head of the information sector in ETA.
More facilities have also been given to large taxpayers who represent less than 15 per cent of the total number of the taxpaying community in Egypt (almost 25,000 companies and corporate entities) while they contribute more than 80 per cent of total income tax revenues.
Typically, work in more than 500 bank branches across the country was extended to 9pm last week to receive due taxes. Taxpayers have also been encouraged to pay due taxes via the Internet.
According to ETA's statistics, large taxpayers contributed LE67.7 billion in 2008/09 compared to LE4.7 billion paid by natural persons (estimated at five million) on their commercial and industrial activities during the same year. Taxes paid by public and private sector employees (around 12 million persons) reached an estimated LE8.2 billion.
© Al Ahram Weekly 2010
