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2007 Assessment

Egypt: Integrity Indicators Scorecard

Egypt: Integrity Scorecard Report > Sub-Category: Taxes and Customs
Indicators		Score
58	In law, is there a national tax collection agency?	100
59	Is the tax collection agency effective?	88
60	In practice, are tax laws enforced uniformly and without discrimination?	25
61	In law, is there a national customs and excise agency?	100
62	Is the customs and excise agency effective?	88
63	In practice, are customs and excise laws enforced uniformly and without discrimination?	25

Indicator and sub-Indicator Details

In law, is there a national tax collection agency?

58: In law, is there a national tax collection agency?

Score:

YES

Comments: There is a unified national tax collection that was established by law no. 14/1939 after abolishing foreign privileges. That law was amended by law no. 157/1981 that included two taxes: one imposed on persons and the other imposed on companies. The modification of this law in law no. 187/1993 changed the tax imposed on persons. Law no. 91/2005 came to establish a higher council for taxes (articles 136-140) that follows the chief of the Council of Ministers.

References: Law no. 91/2005 for organizing taxes and customs, the official newspaper, issue 23, June 9, 2005.

Is the tax collection agency effective?

59a: In practice, the tax collection agency has a professional, full-time staff.

Score:

100

Comments: In practice, the tax collection agency has a professional, full-time staff that works to secure the rights of both tax payers and the state. The tax collection agency abides by relevant laws and regulations and by determining and collecting taxes with the due cooperation and good intention. They are also required to advise tax payers to the legal procedures that guarantee their rights. The agency is keen to provide continuous professional development and training. It has a training institute for new recruits and for training its staff on new forms of tax.

References: Law no. 91/2005 for organizing taxes and customs, the official newspaper, issue 23, June 9, 2005.

59b: In practice, the tax agency receives regular funding.

Score:

100

Comments: In practice, like all other civil service agencies, the tax collection agency receives regular funding from the state.

References: The general budget of the state, 2007-2008.

In practice, are tax laws enforced uniformly and without discrimination?

60: In practice, are tax laws enforced uniformly and without discrimination?

Score:

100

Comments: In its report on April 18, 2004, in the conclusion of the fourth five-year plan 1998-2002, the Central Auditing Apparatus reported a considerable decrease in tax revenues (about 6 billion pounds - US$1.1 billion). It also reported that tax delays that had to be paid to the government by June 30, 2002, amounted to 44.6 billion pounds (US$8.1 billion). This decrease in tax revenues and these delays are due to the corruption prevailing tax compromises between companies and the tax agency staff. As for civil servants, taxes are deducted before they get their salaries and wages. With their low salaries and high prices, taxes on civil servants are proportionately high. Since they are unable to offer bribes to the tax agency staff, craftsmen are the most oppressed in tax collection processes. They have to pay the arbitrary amounts determined by the tax agency staff or be exposed to legal troubles with the tax agency. In many cases small commercial projects are closed after the first contact with the tax collection agency. There is a widespread discontent with the way the agency deals with its clients. While owners of big businesses make massive profits from escaping taxes, poor people are the main source of tax revenues. Within this same politics, the government offers tax and custom breaks to big businesses, including tax and custom exemptions. At the time poor people close small groceries to avoid arbitrary tax determination processes, the government exempts big companies working in the field building hotels and tourist villages from taxes. This unjust treatment is supported by the law of finance.

References: Saber Nail, Corruption and Marriage between Politics and Wealth, Al-Khamaseen publishing house, Cairo, PP. 37-38.

In law, is there a national customs and excise agency?

61: In law, is there a national customs and excise agency?

Score:

YES

Comments: The first custom agency was established by a decree by Khedive Ismail in 1864. The National Custom Department was amended by the customs law issued in 1930. The law regulating customs was issued in 1963, with no. 66.

References: The web-site of the Egyptian government: www.eg.gov.org

Is the customs and excise agency effective?

62a: In practice, the customs and excise agency has a professional, full-time staff.

Score:

100

Comments: In practice, the Customs and Excise Agency has a professional, full-time staff. It has electronic programers and analysts for managing the computer administration in all customhouses. The main category of employees in customs offices is that of the staff working in customhouses using customs applications. Article 25 of law no. 66/1963 for organizing customs, stipulates that civil servants in customs appointed by decisions of the minister of Treasury (Finance) have the authority of judicial arrest.

References: The web-site of the Egyptian government: www.eg.gov.org;

Article 25 of law no. 66/1963 for organizing customs.

62b: In practice, the customs and excise agency receives regular funding.

Score:

100

Comments: In practice, like all other civil service agencies, the Customs and Excise Agency receives regular funding from the state.

References: The general budget of the state, 2007-2008.

In practice, are customs and excise laws enforced uniformly and without discrimination?

63: In practice, are customs and excise laws enforced uniformly and without discrimination?

Score:

100

Comments: As in tax collection practices, the government tends to support big businesses and gross production, not small ones. This support is exemplified in exempting these big businesses from taxes and customs. At the time small enterprises and individuals are required to pay their customs in full, the government exempts from customs the big companies that build hotels and tourist villages.

References: Saber Nail, Corruption And Marriage between Politics and Wealth, Al-Khamaseen publishing house, Cairo, PP. 37-38.