Egypt’s Finance Ministry finalizes draft law to resolve tax disputes
LEGISLATION WATCH- FinMin finalizes draft law to resolve tax disputes: The Finance Ministry has drawn up a temporary, six-month law to facilitate the process of resolving open tax disputes, according to a cabinet statement. The bill, which is being fast-tracked, has been sent to Cabinet for approval. The government expects the legislation to be approved by the House of Representatives and signed into law by no later than the end of the month. It would come in the form of two new sections to article 110 of the Income Tax Act, which legislates late tax payment fees.
What does the bill entail? The draft law would, if passed, limit the period over which to determine the late fees to three years. It would also provide discounts of up to 30% on fines for late payment provided the taxpayer makes the full disputed tax payment and does so before the committee mediating the dispute issues its decision.
The draft law looks like it will replace the Tax Dispute Resolution Act that expired earlier this month. The act, which had passed the House in September 2016, took tax disputes away from courts and handed them over to newly-established expert committees to seek amicable settlements.
Why the six-month time limit? It appears that the draft law would be put in place until the ministry wraps up an overhaul of the 2005 Income Tax Act, which is expected to have a built-in tax mechanism to resolve tax disputes. The mechanism would a tiered system whereby investors would be able to pay a percentage of the disputed amount to resolve the issue without the need for lengthy resolution procedures. Enterprise saw a copy of the draft last October. Last we heard, the bill was close to being handed to cabinet for approval, but it remains unclear when it would then make it to the House for a vote.