The variation between initial revenue of taxes in the first quarter of current fiscal year and the actual revenue registered in Central bank of Egypt (CBE) is normal, said head of the Tax Authority, Mamdouh Omar, according to a statement from Ministry of Finance.
Omar made this statement in a response to concerns raised around the discrepancies between tax revenue and cash in the CBE, after the authority announced revenues last Wednesday.
The Tax Authority announced that it has collected EGP 80.3bn in six months of the current fiscal year, where the income tax revenue amounted to EGP 51.1bn and the sales tax valued at EGP 29.2bn from 1 July until 10 December.
Tax revenue currently in the CBE amounted to EGP 49.81bn which represents an EGP 1bn increase from the same period in 2012/2013 fiscal year, according to a statement from the ministry. Omar pointed out that this is a 19% increase.
Omar was quoted in the statement as saying that what counts is the final tax revenue at the end of the fiscal year not the semiannual ones.
“The authority has announced tax revenues, from July through December in an effort to maintain transparency and make information available to the public,” Omar said.
The largest portion of tax revenue throughout the year usually comes in March and April, explained Omar. “The season for submitting the tax returns starts in January and ends in March for individuals and in April for companies. 45% of income tax is collected in this period.”
The target tax revenue is estimated at EGP 325bn, Omar said.
The Ministry of Finance announced in October amendments to the income tax law, including increasing the limit of personal exemptions from EGP 4,000 to 7,000 annually. Omar noted earlier that these exemptions would lead to an annual loss in revenue of EGP 4bn for the treasury.
He pointed out that the first EGP 1,200 earned by all workers within the government is not subject to income taxes. Workers with a salary of up to EGP 5,000 would benefit from the first income bracket exemption. The second bracket, from EGP 5,000 to 30,000, is subject to a 10% income tax rate.
The third bracket, from EGP 30,000 to 45,000 is subject to a 15% tax. The fourth bracket, EGP 45,000 to 250,000 is subject to a 20% tax. The fifth bracket, more than EGP 250,000 is subject to a 25% tax.