Deputy Minister of Finance for Tax Policy Amr El-Monayer said that the current fiscal year is expected to witness a change in tax rates on some tax transactions.
During a press conference at the ministry on Sunday, he said that “we may consider the rate of tax on one or two industries in the current fiscal year.”
Meanwhile, he stressed that there will be no amendments to the income taxes affecting individuals, pointing out that the ministry is working to analyse the content of the tax gap.
Real estate tax revenues rose during the last fiscal year by 69% compared to FY 2015/2016.
The Ministry of Finance’s data showed on Sunday that the real estate tax revenues were up to EGP 2.2bn in FY 2016/2017, from EGP 1.3bn in the previous fiscal year.
Total tax revenues increased during the last fiscal year by 31% compared to FY 2015/2016.
The proceeds of tax reached EGP 462bn in the past fiscal year, up from EGP 352bn.
This is the first year in which the value of tax revenues exceeds the target of the government.
El-Monayer said that the increase in tax revenues is due to the shift to the value-added tax, instead of sales tax.
He added that the inflation and price hikes contributed to increasing taxes indirectly.
The total value-added tax (VAT) during the last fiscal year increased by 53% to register EGP 183bn, compared to EGP 120bn in the previous fiscal year.
Last fiscal year saw the introduction of the VAT for the first time, instead of sales tax.
According to the Deputy Minister of Finance, the Ministry of Finance aims to increase the proportion of tax revenues during the next five years to reach 18% of the GDP, up from 13.4% in the previous fiscal year.
In another context, El-Monayer said that the ministry completed a settlement of a tax dispute worth EGP 13bn with the Egyptian General Petroleum Corporation (EGPC).
He noted that the ministry received some 10,000 tax dispute settlements, with a value of EGP 62bn. The ministry has settled 4,138 disputes with revenues of $15bn, including the one with EGPC.
In September last year, the House of Representatives passed the Law on the Settlement of Tax Disputes, which allows for the settlement of disputes arising out of the application of income tax laws and all other tax laws.
Parliament has set the law in force for one year and the Ministry of Finance is currently considering extending the law to accommodate requests for settlement of tax disputes.
The Ministry of Finance expects, with the beginning of the application of the law, the proceeds to reach EGP 15-18bn.
It is estimated that the number of tax disputes that have reached the courtroom is currently around 160,000 worth EGP 47bn.