• Income tax modifications aim at widening taxation basis to increase expenditure on public services.
• Revocation of stamp tax on stock exchange transactions, and levying a 10% tax on its capital profits.
• Tax exclusion for bonus shares allotment, and tax reduced to 5% on long term investments.

"The Economic Group"(EG) held a meeting yesterday night presided by engineer/Ibrahim Mahlab, the Prime minister.

In the press conference that followed the meeting, Dr. Hany Kadry Dimian- minister of finance - stated that the EG examined some of the enquiries about the tax law modifications now being prepared by the ministry of finance and studied by the government, such draft law aims at widening the taxation basis in a way that enables the state to increase expenditure in the items that help raise the efficiency of the services rendered to the people, protect the rights of the poor, and consolidate social justice.

 Kadry assured that the ministry, while performing these modifications, is keen to make them facile and clear and to keep balance between realizing justice in bearing tax burdens and maintaining a healthy atmosphere for investment and capital market in Egypt. The draft modifications include levying a 10% tax on the actually realized net profit    of the portfolio at the end of each year for individuals and artificial persons. The draft law proposed the revocation of the stamp tax currently levied on stock exchange transactions, and ratified instead a 10% tax on the cash allotment of shares, to be reduced to 5% on long term shareholders whose ownership quotas are not less than 25% as being strategic shareholders. This draft law also included exempting the bonus shares that the enlisted (in the stock exchange) corporates allocate to their shareholders from allotments tax.

 He added that the present economic crisis of Egypt is not only related to the revolution but its beginnings go back to the year 2008 when we were influenced by the global financial crisis, then the current political events on the road to democracy have aggravated the economic situation.

 During his first meeting to be held outside the ministry - in The Sales Tax Training Center - with the heads of the Tax Administrations &Departments all over Egypt, the minister of finance stressed the important role played by tax officers in supporting the public budget through collecting the state's rights of taxes which he described as " the society' right" on the first place. He highlighted the fact that the ministry does not treasure up the collected taxes but it re-pumps   them in the national economy's veins to fund the public services and satisfy the society needs specially those of limited incomes.

 His highness added that the ministry will work on several axes to realize this orientation: First, improving the present tax legislations (or laws) in order to widen the base of the tax community and achieve justice through distributing or spreading the tax burdens on all     the well -to- do   people.

He explained that the second axis will focus on   developing the tax departments and enhancing the skills of its officers; so, he declared that he asked the head of the Tax Department to make a comprehensive survey of the worn-out old tax buildings to lay a plan to revamp them, in addition to supplying all the departments with their needs of computer sets.

 He also stated that the organizational structure of the Tax Department has been stable since 20 years which made it inflexible, so it is a must to reconsider activating the administrative structure and its different administrations. Some of these administrations have to be terminated(or removed) while some others need upgrading, plus creating new ones.

The plan, according to the minister, will also include accelerating efforts to merge Sales Tax Department with Income Tax Department to benefit by the potentialities of the two to upgrade the taxation method, showing that it is not just merging buildings and administrations, but it also includes merging work methods in: checkup, collection, and survey, plus unifying the ruling laws concerning penalties of tax evasion, addressing tax abnormalities, and connecting information systems  to build an integrated data base for the taxation community as well.

 As for what some of the administrations' heads   referred to concerning the geographical system for the free vocations as each tax officer knows better the activities of free vocations lords in his area, the minister replied that he is considering building more free vocations administrations so as to limit tax evasion in this sector.

The minister reassured his support and protection for the honest tax officers who devoted themselves to serve their country rightfully and in accordance with the law. He asked the tax officers to combat who commit malpractices because tax officers represent the state' economic sovereignty and they deserve to get the due care &services they deserve versus their exerted efforts for the sake of Egypt.

He, also, illustrated that The Ministry of Finance aims at achieving tax revenues in accordance with law and within the framework of tax justice in order to limit tax evasion which has become rampant nowadays due to security laxness.

As for what is said about the importance of incriminating not issuing receipts as no action was taken in this respect, Dr. Mustafa Abdulqader- the head of The Tax Department – said that The Department is studying a tool to use a substitute document for the receipt especially in the sectors where it is difficult to get a receipt as transport, and construction sectors. The aim is to facilitate financers' affairs. In this respect, The Finance Minister asked The Tax Department to make a study about creating a new administration concerned with checking revenues receipts as there are always complaints that these receipts are not sound, thus wasting a part of the Public Treasury's rights. He also stated that it is possible to sign a cooperation protocol with the concerned bodies abroad to tighten control in this respect.

Dr. Mustafa Abdulqader  has praised the Minister's initiative and his meeting with the tax officers making them topping the list of the ministry's officials. He added: this puts extra responsibilities on our shoulders to activate the role played by the tax tool as one of the basic confluents of the state's resources.

 Finally, His Highness, the Minister of Finance is supposed to hold other meetings with young tax officers especially those recently appointed, and the employees' syndicates. This comes as a step within the framework of direct contact with The M.O.F's employees to solve their problems, improve their performance, and to achieve the sought targets.