Drops of tax “reforms” have been percolating from the cabinet to the public over the past few days, leaving the latter surprised, bewildered and anxious as to what’s yet to come. Wednesday the government approved a progressive income tax and variety of taxes on the securities market.
Yesterday, a one per cent bump in sales tax across most products and services, with some areas such as the telecom sector being taxed up to 15 per cent, add to that last week’s revival of discussions of the 10 pm curfew on shops and restaurants, which doesn’t seem coincidental given the latest bundle of tax initiatives and the presence of the IMF’s delegation in Egypt.
We’re obviously at the cusp of an economic reform strategy that the government is rather hesitant to announce all at once. Given the yawning budget deficit, and pressure from the IMF for a clearly defined roadmap to resolve the current economic predicament, the cabinet is attempting to demonstrate its ability to contain this mess. Their brilliant solution, naturally, is a blunt approach to solicit funds via a series of tax reforms, their detriment to investment prospects notwithstanding.
In principle, the proposed tax reforms are ideal, yet this is hardly an ideal situation. The government is beseeching investors to pour massive funds in large-scale industrial and developmental projects while imposing restrictive regulations that are likely to repel the same targets they’re so keenly struggling to lure.
Taxing IPOs and annual dividend allocation! I wonder who actually came up with such a brilliant idea to further frustrate investors, as if the financial market isn’t gravely suffering already. Doesn’t it smack of double taxation?
Our illustrious prime minister has time and again denied any intention to allow the value of the pound to depreciate. And here it is, plummeting to its lowest rate in eight years. Since the so-called economic reform plan seems to be all smoke and mirrors, why does the government expect the public to empathise with the proposed crippling tax reforms?
Truth be told, the existence of an actual plan is getting more suspect as we witness decisions transpire. The government seems to be improvising its way through the financial crunch, not realising it’s sinking in the mire of its own reforms. Has it crossed the mind of any of the decision-makers that levying this kind of reform during such hard times could only lead to further tax evasion and more corruption? Oh I forgot, Mr President is on top of that one.
Let us not forget the constant reminders of President Morsy, preached in every speech, letter and mosque he prays in; He knows and continues to target those corrupt individuals that are taking the country down the drain. Isn’t it more effective to try and eradicate institutional corruption first? Wouldn’t that make the noble objective of targeting corrupt individuals actually conceivable and not just a meaningless platitude? Alas, our bipolar administration is the crux of our deterioration.