Killed in the cradle
The new tax law issued
last June put taxation—one
of the hitherto most disreputable practices in Egypt—in a different light. At the time, I wrote about the law, and congratulated
finance minister Dr Youssef Botrous-Ghali
on his success in infusing the law
with a new user-friendly
vision. The law was heralded by a wide media campaign.
The new law came as a long-needed reconciliation between the Egyptian citizen and the State, promising to put an end to the hateful role of the State as tyrannical tax collector. Taxpayers no longer had any excuse to evade paying their taxes, since the new law accorded them protection, respect, credibility, and fairness. Tax evasion was thus rendered the dishonourable crime deserving of harsh penalty that it is.
Last December, the executive discipline of implementing the new tax law was issued. Taxpayers and accountants rushed to familiarise themselves with it. There were no prejudices against the law or fears of the manner in which it was to be applied; in fact there was widespread optimism regarding tax-related issues. I was only wary of the attitude of the tax authority staff, and whether or not they would be able to radically change their long tradition of distrusting and tyrannising the taxpayers.
When I finally held the new tax declaration form in my hand, disappointment set in. Unexpectedly, I found I was unable to make head or tail of it; it appeared complicated to a degree hitherto unprecedented. I could not figure out any reason for such complication, so I assumed that the taxpayer was required to consult a chartered accountant. This appeared reasonable enough since the new law stipulated that a chartered accountant should be held legally responsible for the veracity of the data on the declaration form, equally with the taxpayer, as a precondition for approval of the form by the tax authority.
I took the matter to a friend who is a chartered accountant and heads a prominent accounting and auditing firm. My friend told me that accountants and auditors were very upset with the complications in the application of the new tax law which he said, threatened to abrogate the facilities provided in principle by the law. It is beyond the scope of this article to go into the details of the accounting intricacies involved in the tax declaration, but accountants see these intricacies as equally confusing to taxpayer and accountant, and bound to land them both in trouble due to legal violations.
On Saturday 25 February, a large assembly of accountants and auditors convened at their syndicate headquarters in
The assembly commissioned a delegation to meet the finance minister, explain the accountants’ and auditors’ viewpoint, and demand amending the tax declaration forms and the new tax law application discipline. The assembly was considered in convention until this evening, when the most recent developments will be reviewed. The accountants and auditors assembled announced their refusal to approve or sign any tax declaration forms until the situation is cleared up.
The problem is not the sole concern of accountants or auditors, but directly affects taxpayers. The end-of-March—in some cases end-of-April—deadline for presenting tax declaration forms is swiftly approaching. If the problem is not quickly resolved, countless Egyptians will find themselves in unfortunate predicaments, and the new tax law upon which such high hopes had been set would have been killed in the cradle.