Chairman of the Egyptian Tax Authority Mamdouh Omar said that the volume of taxes paid reached EGP 116bn yesterday. He stated that the total amount is predicted to reach EGP 123bn by the end of February, an increase of EGP 21bn on the same period last year, when the total tax receipt volume for February 2012 reached EGP 102bn. By the end of January 2013, the total tax receipts volume reached EGP 108.5bn.
Omar said that 70% of tax receipts have been collected electronically. Sovereign entities such as Suez Canal and Petroleum owe EGP 43bn in binding taxes, and the Tax Authority has collected EGP 40bn so far. Omar added that the deterioration of the economy is behind the lower tax receipts from sovereigns.
Omar stated that the issue of taxes owed by national newspapers is progressing towards a solution, and the Tax Authority will prepare a committee to handle this case due to their serious financial losses. He also mentioned that he will hold the taxes owed by press organisations from before 2006 until they are able to sell off assets, including tracts of land, to pay off their debt. National press organisations currently owe EGP 10bn in back taxes.
The Minister of Finance held a meeting with the boards of directors of national newspapers last week to discuss a proposal regarding paying the assets of delinquent amounts only and the possibility of an exemption from benefits, which make up 50% of arrears.
In December, President Mohamed Morsi announced sweeping increases in sales taxes and stamp duties on a wide range of consumer goods and services, and amendments to Egypt’s income and property tax laws.
The tax law states that the maximum debt to equity ratio is 4:1. In the event that the debt exceeds this ratio, the excess interest is not accepted by the Tax Authority as a deductible expense. The law allows a transition period of five years to give companies that do not comply with the capitalisation ratio set by the law the opportunity to fall in line with this ratio.