The Egyptian government is taking rapid steps towards achieving financial inclusion and digital transformation in various fields, in serious attempts to integrate the informal economy into the official umbrella of the state.

 Within the framework of the state’s efforts, represented by the Ministry of Finance and the Tax Authority to support this digital transformation, build bridges of trust among the tax community and the business sector in Egypt, in addition to spreading awareness among the business sector and investors to create job opportunities and establish projects according to specific legal governance, knowing their tax rights and duties and abide to them.  In this context, Canada Egypt Business Council and the Egyptian Business Council for International Cooperation in cooperation with MEC held a forum entitled “The Tax Authority between Digital Transformation & Transfer Pricing Strategy”.

In his opening remarks, Mr. Motaz Raslan chairman of CEBC and ECIC mentioned that the electronic bill system comes within a number of projects undertaken by the Tax Authority to digitize the tax system, within the framework of implementing the state’s goals towards digital transformation and achieving Egypt’s vision 2030.

He added that many questions in the minds of citizens currently revolve around the extent of rushing in the implementation of the electronic bill, and the extent of the preparation of the electronic bill to cover the various sectors of the state.

Mr. Raslan went on to highlight that the Tax Authority has made great attempts to develop and digitalize the tax sector through different projects along with the electronic bill, including the electronic receipt and the unified tax procedures law.

He explained that recent figures indicate that more than 135 thousand companies joined the electronic invoice system and more than 412 million invoices have been added to the system since the beginning of its activation, adding that these are figures that are observed so far, which indicates a serious interaction and acceptance of the system among tax payers. Raslan concluded his speech hoping that the digital transformation process may be reflected on all sectors of society in an attempt to serve the welfare of both the citizens and the state.

Advisor to the Minister of Finance, Dr. Hisham El-Hamawy stated that the ministry decided to extend the deadline to register individual entities on the electronic bill until April 30, 2023, motivating the business community to help the ministry to implement the electronic bill. 

Dr. El -Hamawy stressed that the application of the electronic bill and other digitization projects contributes to the inclusion of the informal economy within the official economy. And he pointed out that the application of the electronic tax system to the value added tax succeeded in discovering a tax gap between what must be collected and what has already been collected.

He ended his speech by emphasizing that the high value of taxes collected is not the result of the imposition of new taxes, but rather due to the discipline of the tax system and the reduction of tax operations, noting that the projects implemented by the Tax Authority come in the interest of the state and the financiers all together.

On the same context, Head of the Egyptian Tax Authority, Mr. Mokhtar Tawfik stated that the primary goal of the digitization projects implemented by the Authority is to harmonize the tax community, adding that the Tax authority started to electronically accept tax declarations and this applies to the legal and natural tax payers as well.

Mr. Tawfik added that the electronic bill for companies has been activated by100 percent as they possess electronic systems, despite some challenges they may emerge when used by tax payers from certain professional activities such as doctors, pharmacists and accountants due to their lack of readiness to switch to the electronic system, knowing that consultations have been held with all unions and bodies related to these professional activities to explain the system and how to apply before obligating them to register.

He confirmed that the Authority decided to extent the deadline until April 30, 2023 so that tax declarations can be submitted for last year, provided that during that time a comprehensive vision of the Tax Authority will be prepared and disseminated through various meetings with the targeted entities of tax payers involved in professional activities in order to help them join the electronic tax system. This is in addition to explaining the system to all related tax payers and carefully study their concern in order to propose the suitable solution for each case. 

From his side, Mr. Khaled Abu Zahra Egypt Tax Partner & GCC Tax Leader – MEC and the head of the Taxation and Customs Committee – CEBC & ECIC pointed out to the acceleration of all countries across the globe including Egypt towards digital transformation in all fields, especially the economic and commercial fields. He also stressed on the significance of integrating the informal economy within the official economy of the state. “It has become necessary for economic legislation to develop to keep pace with the digital transformation in Egypt. It was imperative to set a system for the electronic bill, digital translation of the tax system, and the transfer pricing, he concluded”.  

Then the floor was given to Ms. Rasha Abdelaal, Assistant Head of the Tax Authority & Head of the Central Department of Strategic Management and Ms. Afaf Ibrahim, Assistant Head of the Tax Authority for Agreements & Transfer Pricing where they gave informative presentations discussing the  “Digital Transformation of the Tax System” and “Transfer Pricing Strategy” explaining the state’s vision towards the digital transformation of these significant domains.