* Tax reforms make investment in Egypt more attractive to international companies.

* LE 5.2 billion in added value in the soft drinks industry, and 11% annual increase in job opportunities.

* 20%...

  * Tax reforms make investment in Egypt more attractive to international companies. * LE 5.2 billion in added value in the soft drinks industry, and 11% annual increase in job opportunities. * 20% annual increase in tax revenue from the gaseous drinks sector since 2005. * Tax reforms contribute to pumping new investments in the sector estimated at USD 200 million. * Tax burden on industry reduced from 29% to 19% Egyptian Finance Minister, Dr Youssef Boutros Ghali, received from World Bank President, Robert B. Zoellick, a copy of the study prepared by the International Tax and Investment Center in collaboration with Oxford Economics on “Economic benefits of sales tax reduction on soft drinks in Egypt”. The study indicated that the economic contribution of the soft drinks industry in the period 2005-2009 increased the added value produced by this industry from LE 1.9 billion in 2005 to LE 5.2 billion in 2009, achieving an annual growth rate of about 27% in average in the last five years. Employment opportunities made available by this sector have risen from 113 thousand in 2005 to 173 thousand in 2009, at an annual growth rate in excess of 11%. Thus, the soft drinks industry has contributed around one percent of the total employment opportunities made available by the Egyptian economy in the last five years.  As for the addition the soft drinks industry has contributed to the tax revenues, the study monitored an increase from about LE 775 million in 2005 to LE 1732 million in 2009, at an annual growth rate in excess of 20%. This amount of the revenue represents around one percent of the total tax revenues in 2009.  The improvement of the economic situation in Egypt has led to pumping new investments in the market by the international Coca Cola company, amounting to around USD 200 million, geared to its latest factory opened in Assiut, Upper Egypt. The study reviewed the old taxation system which was in force prior to April 2005 when the soft drinks taxes ranged between 50 and 60 percent, in addition to the profit revenue tax of 40%. At that time, the sector suffered from discriminatory taxation which brought about financial losses for Coca Cola in the recent years. However, after the recent application of a series of economic reforms by the Ministry of Finance, including tangible tax reductions, which contributed to the flourishing of business activities in Egypt and led to more economic expansion, several economic benefits were accomplished. Tax on profits revenue has been cut to 20%, and the average of the effective taxation on sales, calculated by dividing the total of all paid taxes by the total taxable revenues, also went down from 29% to 19%. The study asserts that high tax rates stand as an obstacle in the way of developing economic activities and boosting investment opportunities, which in the end could also hinder collecting more taxes. In addition, the study suggests the new taxation system has assisted the Egyptian soft drinks industry in achieving more profits and more expansion in investment, which eventually leads to the Egyptian government gaining more in tax revenues. (Source: Ministry of Finance)