Counselor to the Head of Tax Authority Announces Measures to Facilitate Transactions with Taxpayers

ETA’s Deputy Head: Customs Authority Coordinates with Tax Authority Harnessing Digital Services

Tax Authority Considers Issuing Law Waiving Late Payment Penalties to Support Taxpayers Until the End of December 2024

Head of Investors Support Unit at Finance Ministry: Clearing House to Be Established to settle financiers’ dues

The British Egyptian Business Association (BEBA) organized a seminar entitled “Challenges, Opportunities Facing Investors.” The panelists discussed the most prominent problems facing taxpayers and investors, in addition to reviewing the solutions and facilities provided by the Tax and Customs Authorities, in order to facilitate the business community.

In the beginning, Eng. Mohanad Taha Khaled, Managing Partner at BDO Khaled & Co., highlighted many challenges facing the business community in relation to the tax system, pointing out that there are attempts by the Ministry of Finance and the Tax Authority to solve the problems and challenges facing investors and taxpayers.

Khaled also pointed out that automation has been one of the positive steps that have been implemented recently and has had a tangible impact on the tax system, either through the launch of e invoicing or e-receipt, noting that the seminar aims to untap cooperation opportunities between the business community, investors, and the Tax Authority, so that investors can focus on the future of their businesses without being exposed to surprises regarding tax decisions.

In the same context, Dr. Sayed Sakr, Deputy Head of Egypt’s Tax Authority, said that the Ministry of Finance drafted a tax policy document to ensure that tax policies are not to be altered, explaining that the new income tax law being prepared takes into account improving the relationship between the taxpayer and the authority and ensuring no disputes, as the law may include the cancellation of some tax items, or amendments to the tax rate to become equal to or less than the current one.

He pointed out the current cooperation with the OECD, stressing that the tax policy document implies that any tax legislation that is prepared retains all the advantages existing in the previous legislation.

He affirmed that the goal of the document is to set standards to ensure the relationship between the authority and the taxpayer is a relationship based on transparency and clarity, pointing out that there are clear instructions for the tax offices and various tax regions to provide facilities for taxpayers.

Sakr added that there are internal committees working to solve the problems of taxpayers in all tax offices by referring all files to them in parallel with the work of the tax appeal committees, explaining that the authority has created an electronic system that allows tax offices to view all instructions and circulars that are issued to facilitate tax procedures.

The Deputy Head of the Tax Authority noted that the Tax Authority has given the heads of tax offices discretionary powers to facilitate and solve the problems of taxpayers.

He stated that the Ministry of Finance plans the renewal of the termination of disputes law until the end of next December. Meanwhile, there is no intention to renew the law easing fines for late tax payments, because it equates non-compliant taxpayers with compliant taxpayers.

He stressed that the authority is working on a new law instead of the Income Tax Law No. (91) for the year 2005, to keep pace with the major changes witnessed by the Egyptian Tax Authority and the Egyptian economy as a whole, and it will be put up for community dialogue in the near future.

The authority had previously laid down the controls and procedures necessary to apply the provisions of Article No. 3 of the Income Tax Law issued by Law No. 30 of 2023, by issuing Executive Instructions No. 95 of 2023 to achieve the goal of enacting Article 3, to contribute effectively to resolving accumulated and pending tax disputes before the different stages of dispute consideration, to be subjected to simplified tax laws and benefit from the provisions of Article No. 3 of Law No. 30 of 2023, provided that the annual turnover does not exceed EGP 10 million.

This article is applied on commercial, industrial and professional activities, as well as real estate wealth, explaining that the annual turnover of the taxpayer must be calculated after excluding the scope of salary tax and what is in its place, and the tax is calculated accordingly.

For his part, Ahmed Abou El-Hassan, ETA’s Deputy Head Egypt Customs Authority, confirmed that the government has made great efforts to enhance the automation and digitization of government transactions, with which the business community is involved.

He added that there is integration between the Customs Authority and all government agencies to facilitate the customs clearance of goods and shipments, explaining that there is coordination with the Egyptian Tax Authority.

He affirmed the authority’s focus on integration with all government entities to expedite customs clearance procedures for goods and shipments. He highlighted ongoing coordination with the Egyptian Tax Authority regarding the “Nafezah” system, e-invoices, and e-receipts.

Abou El Hassan emphasized the Customs Authority’s adherence to the directives of the political leadership regarding activating comprehensive risk management measures, including legislative procedures to facilitate clearance processes. He explained the authority’s aim to reach 80% of shipments processed through the “Green Lane” in the coming period, compared to the current 20%.

The “Green Lane” is a mechanism that minimizes document and goods inspection due to the authority’s adoption of a risk management system based on pre-registration of shipments, which significantly reduces risk levels.

Abou El Hassan indicated prioritizing registered entities within the Authorized Economic Operator (AEO) and Authorized Customs Broker (ACI) systems to further increase “Green Lane” utilization, currently handling 20% of shipments.

He also highlighted the authority’s recent efforts to develop a new electronic system for digitizing customs operations. Significant progress has been made, but the development process is not yet complete, as several internal applications and electronic integrations with other entities require finalization.

Abou El Hassan added that the Customs Authority has been working for two months on the e-commerce file in collaboration with the USAID TRADE project for trade development and export promotion in Egypt.

He explained that multiple meetings have been held with e-commerce companies to identify their challenges. The authority is collaborating with the Egyptian Post, the most prepared and ready operator, which possesses an electronic system that both the Customs and Tax Authorities can utilize for e-commerce purposes.

Abou El Hassan emphasized the growing focus on e-commerce as a mechanism to promote exports, especially given the relatively low volume of e-commerce exports from Egypt due to numerous challenges faced by exporters in shipping their products due to high administrative costs. The authority is working to address these challenges through studies conducted in collaboration with operating companies within the framework of the cooperation agreement with the TRADE project.

Meanwhile, the Head of the Investor Support Unit at the Ministry of Finance, Nesreen Lashin, announced the ministry’s plans to establish a new department within the unit for reconciliation. The aim is to strike a balance between the dues owed to taxpayers and their outstanding liabilities.

Lashin elaborated that the first phase of this department will focus on taxes, customs, real estate taxes, and export support. She noted that the Minister of Finance intends to include insurance within this department in a later phase. She affirmed that since its establishment, the unit has contributed to resolving the issues of about 2,000 investors. Lashin further announced that a new phase of export burden relief will be announced before mid-June.