The head of Egypt's tax authority (ETA) Emad Sami said on
August 26 2018 that an amendment to the Income Tax Act had been
drafted to allow the finance minister to access corporate bank
accounts to help combat tax evasion.
Central bank (CBE) governor Tariq Amer responded strongly to
the comments later the same day, saying that the CBE would not
accept, under any circumstances, allowing the finance ministry
to access bank accounts belonging to corporations or
individuals, adding that the CBE will protect the
confidentiality of customer bank accounts.
Sami explained in a statement to Reuters that the amendment
does not contradict the law governing the CBE or current
judicial procedures. He stressed that the goal of this proposal
was to reduce tax evasion and that not all accounts would be
reviewed, but only those that provide unrealistic data. He
added that tax inspectors would be allowed to review bank
accounts strictly with the approval of the finance
minister.
Responding to the storm of criticism from leaders of the
banking sector, Sami stressed in an official statement that the
ETA respects the law on bank account confidentiality, and that
the confidentiality of bank accounts is guaranteed for
investors.
According to Ruqaya Riad, legal adviser to the Federation of
Egyptian Banks (FEB), the possibility of implementing this
amendment has been ruled out, due to the negative impact that
it would have on the banking sector and the wider economy.
Egypt is seeking to grow its tax revenues by 4 percentage
points of GDP (up from 14% currently). A comprehensive
amendment to the full tax law is expected next year, including
stricter penalties for tax evasion.
Ali Najm (ali.najm@eurofast.eu)
Eurofast
Tel: +357 22699222
Website: www.eurofast.eu