Thursday, December 2, 2010

Cablegate And Egypt : The First Batch Goes On “4”

Ok gang this is the last cable in that patch of cables released by Wikileaks this week, I dedicated this post for this last cable because it is very interesting , very provoking and very controversial.
This cable is a recent one , it was sent earlier this year on February 21,2010 from the US embassy  in Cairo. The cable is unclassified. It was a summary for the meeting that was held on February 7, 2010 between between U.S ambassador Margret Scobey and Ashraf Al Arabi Egypt’s tax commissioner then , yes Egypt’s tax commissioner and please do not ask me now why the American ambassador would have a meeting with the Egypt’s tax commissioner because this is just the start.
The U.S ambassador discussed with Egypt’s tax commissioner the controversial real estate taxation law , the results of the tax revenue and if there are new taxes proposed in the new year !!?? You will find that I have copied almost all the cable for its importance.
In a February 7 meeting, Ashraf Al Arabi, Egypt's Deputy Minister of Finance for Tax Policy and Commissioner of the Egyptian Tax Authority, told us that he was confident that implementation of the real estate tax would go ahead as scheduled (ref A). He acknowledged the negative publicity surrounding the registration of properties, which had "created anxiety" among taxpayers. Despite this, he was confident that the plan would move forward  with "no official changes." Referencing President Mubarak's comments last month,  in which Mubarak suggested he might advocate for a progressive tax structure or possible homestead exemption, Al Arabi told us that the real estate tax situation had subsequently "been clarified to the President" and that Mubarak supported leaving the law intact. 
Al Arabi explained that there were a number of reasons for the public outcry against the real estate tax: Since most income tax is paid through direct payroll deductions, the vast majority of taxpayers in Egypt have no experience dealing directly with the Tax Authority (Note: for taxpayers who have income tax deducted by their employer, there is no annual tax filing requirement. End note). His office, Al Arabi said, deals directly with only about 3.1 million corporate and self-employed tax filers. The new real estate tax registration requirement will now bring 40 million Egyptians in contact with the Tax Authority. He added that part of the outcry relates to people's resistance to disclosing their real state holdings.According to Al Arabi, Egyptians have traditionally used real estate as their primary store of wealth, and people do not want information on their assets disclosed to the government or made public. This echoes his public comments suggesting that once holdings are declared, some people, particularly government employees, might find it difficult to explain where they got the resources to buy the properties they own. 
In Egypt's fiscal 2009/10 budget, tax revenues are projected at LE 145.5 billion (US$26.5 billion) down 10.8% from last year. Actual tax revenues during the first six month of the fiscal year (July-December) are down 8.5%. Tax revenues from the Egyptian General Petroleum Corporation (EGPC), the state-owned oil company, which were budgeted to drop 45% due to lower world oil prices are actually running about 6% lower than the already reduced budget forecast. With the exception of the EGPC revenue, Al Arabi asserted that revenues will meet projections and that the shortfall from EGPC taxes could be made up by better than expected revenues from taxes on treasury bills and bonds, which are taxable for the 
first time this year. 
He estimated that the government's tax revenues currently amount to 13-14% of GDP, but that by taxing the large informal economy, this could rise to 20%. 
Al Arabi credited US assistance through USAID with much of the progress in both automation and training within the Tax Authority. He added that further progress in tax collection will be reliant on the quality of information gathered and the proper analysis of that data. He said he plans to create an "internal inspection unit" and will build an "intelligence center" for data collection and verification. 
May be this is why Al-Araby had this meeting , there was a US assistance through the USAID !!
What do you think about this cable?
You can catch the previous posts as follows :
  1. Cablegate and Egypt : The first Batch goes on “1”
  2. Cablegate and Egypt :  The first Batch goes on “2”
  3. Cablegate and Egypt : The first Batch goes on “3”
By the way Wikileaks founder Julian Assange has become a wanted man by the Interpol.


  1. Sorry Ms. Z but I don't really understand why you are introducing this post as provoking and controversial, when it appears to deal only with a Tax collect initiative...

    I'm probably not aware of other possible implications of such initiative... am I ?

  2. Dear Nour , why did our tax commissioner speak about the Ambassador in the first place about our tax laws and habits !!?? This is a national internal matter.

  3. Yep I get it...Thanks


Thank You for your comment
Please keep it civilized here, racist and hateful comments are not accepted
The Comments in this blog with exclusion of the blog's owner does not represent the views of the blog's owner.