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Government aims for 15.8% tax revenues growth in FY 2015-2016 - Daily News Egypt

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Government aims for 15.8% tax revenues growth in FY 2015-2016

Expected tax revenues for FY 2015-2016 are EGP 422bn, through application of VAT and fighting tax evasion


Ministry of Finance is set to review the final draft of Egypt’s economic reform programme set to precede the acceptance of the country’s pending $4.8bn International Monetary Fund (IMF) loan. (Daily News Egypt)
The Ministry of Finance plans to increase tax revenues for the fiscal year (FY) 2015-2016 to EGP 422bn, compared to EGP 364.2bn in FY 2014-2015, a growth rate of 16.8%.
(DNE File Photo)

The Ministry of Finance plans to increase tax revenues for the fiscal year (FY) 2015-2016 to EGP 422bn, compared to EGP 364.2bn in FY 2014-2015, a growth rate of 16.8%.

In a Thursday statement, the ministry said it will undertake a comprehensive development of the taxation system, to include raising the efficiency and performance of tax-collection entities. This guarantees the state’s rights, as well as society’s, and prevents tax evasion.

The draft FY 2015-2016 budget, according to the Ministry of Finance, includes applying some reform procedures which will be borne by higher income people.

The procedures also include completing the value-added tax (VAT) which is currently partially applied, with the aim of spreading fairness and to resolve the issues in the current system.

“The value-added tax will be borne by the consumer, even the unemployed,” said economist Reda Eissa, adding that the total VAT will amount to no less than EGP 30bn annually.

Eissa believes postponing VAT was better until the parliamentary elections are held, so that it can be discussed. He added that the government yields to the demands of businessmen at the expense of the budget deficit and the poor people whose numbers increase year by year.

“The government lowered the tax on income from 30% to 22.5%, and it also suspended capital gains distribution tax on profits for two years,” Eissa said.

The International Monetary Fund (IMF) recently criticised the postponement of tax on gains for two years. The government targets a financial deficit at 9.9% in FY 2015-2016, compared to 10.8% for the current FY 2014-2015.

The government has also suspended the 5% tax on income of more than EGP 1m a year.

In contrast to the economist’s opinion, who believes that applying the value-added law will raise inflation rates significantly, Ashraf Abdel Ghany, tax analyst, believes that applying the law will resolve the issues of the current tax on sales.

“Most of the experts believe that the added value is not applied; it is applied within the tax on sales and the consumer is the one bearing it,” adds Abdel Ghany.

Abdel Ghany said VAT will include new activities, adding that the basic commodities like services, education, and health will not be subject to this tax.

He said the targeted tax revenue over the next FY 2015/2016 can be through activating the tax bill and redefining the database, including informal sectors and activating information exchange at the Tax Authority.

The expected revenues over the next FY 2015/2016 are at EGP 612bn, with an increase of 26%, while expenditures amount to EGP 885bn, according to the statement of the Ministry of Finance.

During its meeting last Thursday, Egyptian cabinet approved the state’s general draft budget for FY 2015/2016, preparing to present it to the president.

According to the Head of Tax Authority’s press releases, Abdel Moneim Matar, tax revenues over 10 months of the current FY 2014/2015 amounted to EGP 240bn.

The Ministry of Finance hopes customs income would increase to EGP 26.9bn, a growth of 24.8% compared to the amount expected over the current FY 2014/2015.

 

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https://wwww.dailynewssegypt.com/2015/06/20/government-aims-for-15-8-tax-revenues-growth-in-fy-2015-2016/
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