The decree issued Friday evening imposing taxes on trading conducted through Facebook has been widely disputed traders and computer professionals in the local market.
Chairman of the Central Administration Tax Research Salah Yousif said the decree will impose taxes on electronic traders, rather than personal Facebook accounts, comparing it to a similar UK decree that imposed taxes on Facebook.
He moreover announced that the law does not have specific features so far, pointing out that the third-party companies will be prioritised in the law.
Meanwhile, CEO and Marketing Manager at E-chance Solutions Wessam El-Henawy explained that, as companies can operate online from anywhere in the world, it is difficult to curb electronic commerce. As such restrictions will not lead to the loss of hard currency, he noted.
The decree has yet to be implemented and in the meantime companies can try alternatives to pay for e-commerce, such as listing the company’s IP address outside Egypt, whilst still operating in the Egyptian market, he said. These companies generally do not have a billing system, which makes this decree impossible to implement, El-Henawy added.
This decree is a means to bring cash to the country’s treasury, he said, noting that it would pave the way for registered partners to deduct taxes from paid advertisements to curb e-commerce.
“The government does not have a clear vision as to how to implement this decree,” said founder and CEO of Nefsak.com Sherif Nassar. “The government has not discussed the system of electronic trading across the entire internet; there is no law to regulate e-commerce. Currently, we deal through normal trade and commerce law.”
Sabah Nasr runs a Facebook page selling salted fish, particularly popular during the Sham El-Nessim holiday. She questioned why the government is considering applying this decree on Facebook businesses only, while it is widely-known that Abdul Aziz Street in downtown Cairo is full of businesses selling electronics illegally, without paying taxes.
Lack of market supervision by the government could harm her livelihood, she said, as other businesses sell salted fish at a cost at least 25% higher than Nasr, yet they will not be taxed as they are offline businesses. She also questioned how the government would determine the tax on her business, as most of her work is seasonal or on an order-only basis.
Online businesses could circumvent the decision by working via other methods such as WhatsApp, other social media platforms, or by printing flyers, Nasr said.
This decree will provide hard currency for the country, reduces unemployment rates, and improves citizens’ income . However, according to Nasr, just like the United States, the Egyptian government implements decisions after meeting those who consider themselves as representatives and experts of e-commerce, without actually deliberating the decisions with those who are affected by the decision.
