Egypt: Central Bank of Egypt defends bank accounts secrecy

15 October 2018

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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.