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Experts amend new "unconstitutional" tax laws

The Egyptian Business Development Association hosted a conference in an attempt to suggest corrections to the newly announced tax laws.

“We refuse the announced tax laws since they clearly violate constitutional measures,” head of the Investment Department at the Egyptian Business Development Association (EBDA) Abdallah ElAdly wrote in his research.

The paper was given out to attendees of EBDA’s conference on the effects of the new tax regulations on investment and business in Egypt on Wednesday. Attended by economic councils of eight political parties, businessmen, financial experts, former officials, representatives of Egypt’s Tax Authority, and the consultant of the Finance Minister, the conference’s conclusions and suggestions were formulated into a proper vision and will be presented to Prime Minister Hisham Kandil.

The aim of the conference was to give Kandil a substitute for what was continuously defined as the “emotional” - sometimes even “disastrous” - tax regulations that President Mohamed Morsi announced last month, only to annul them a day later, and re-enforce them after the new year began. These reforms were supposed to help fulfill one of the revolution’s main demands: social justice – except that they do not, according ElAdly.

While economists of opposition parties were more concerned about the timing of the announcement of new tax laws, other experts and businessmen refused the content of the laws and questioned the logic and philosophy behind them.

The happenings of the conference showed that the new laws were not revised by credible consultants or experts, as their content includes loopholes, contradictions and defies the newly approved constitution.

Main concerns pivoted around the unjust separation of income classes and the possibility of creating sales tax exceptions for certain products or services after agreeing with the responsible ministers. This defies the paragraph in the constitution that forces everyone to comply with the same tax regulations, unless the law states otherwise.

Several experts also pointed out that the problem – in fact – did not lie in the laws before they were amended, but rather in the lack of their implementation by the Tax Authority. “The real revolution needs to happen in the hierarchy and performance of the governmental institutions. The core of tax reform lies in an efficient tax authority,” Ashraf ElAraby, a taxation expert at the World Bank, stated.

Among the participants were EBDA Chairman Hassan Malek, former Minister of Economy Sultan Abo Ali, consultant of the current Finance Minister Dr. Mohamed Sorour, and Deputy of the Economic Committee in the Shura Council Abdel Hamid ElGammaal.
The attending parties were ElWafd, Masr Party, New Labor Party, Masr ElQaweya, ElWasat, Freedom and Justice Party, ElWatan, and ElTagamo’.