It appears that the Egyptian government does not have a specific ceiling for taxation of its citizens. After 7 years running in a marathon collecting fees under several names, I recently imposed a tax on drug and arms dealers and prostitutes.
And the Tax Authority recently announced - through the head of its central administration Said Fouad - the application of the income tax law to drug and arms dealers and prostitution in the event of their arrest.
He explained - in a telephone interview with the Egyptian Channel 1 - that the interest would hold the exact same person as the financier engaged in a commercial or industrial activity, considering that this step is not a recognition of the legitimacy of criminal activities, "but it is a recognition of revenue subject to tax", he said.
And the government official went on to explain how the illegal business merchants will be held accountable in the event that "if the merchant recognizes the practice of the activity since a certain period, a tax will be taken from him for this period during which he worked, and we will discuss it to know how much the merchant and the amount of gain; and based on his approval we will determine the value of the tax."
According to a statement issued by the Ministry of Finance, the government aims to raise the tax revenue during the next fiscal year to 964.8 billion pounds compared to 856.6 billion pounds in the budget for the current year (the dollar equals about 16 Egyptian pounds)
The expected value of taxes during the coming year will reach 74.9% of the total new budget revenue, and it is scheduled that the income from the income tax during the next year will increase to 460.9 billion pounds compared to 396.3 billion pounds in the budget for the current year.
Cartoons Marathon
The tax on illegal business was only the culmination of a long process of imposing fees, which began since President Abdel Fattah el-Sisi took power 7 years ago.
Al-Sisi started his rule by amending the Income Tax Law, in July 2014, and the new legislation stipulated the imposition of annual taxes on the total net income of natural persons residing in relation to their income earned in Egypt or abroad if the country was the center of their commercial, industrial, or professional activity.
Law 91 of 2005 applied the annual tax to the total net income of natural persons, residents and non-residents, in relation to their income generated inside Egypt only.
During the first three years of Sisi's assumption, taxes varied between increasing the fees on cigarette sales to 50% of the sale price to the consumer, and enacting a law regarding the tax on real estate owned by individuals, as well as amending the provisions of the income tax and stamp tax laws.
Al-Sisi also issued the Law on Value Added Tax, and amended the categories of incoming tariffs to include many commodities.
In August 2016, Parliament passed a bill to impose a tax on all judicial papers for litigants before State Council courts, with the proceeds to be directed to the health care fund for ordinary and military judges.
Parliament also approved a bill to establish a fund to improve social and health care services for members of the police and their families, and the legislation approved the imposition of new fees for the fund on all papers issued by the Ministry of Interior.
Those who did not marry and who were divorced from state taxes were not spared, so the House of Representatives approved Al-Sisi's decision to impose a tax on every marriage incident and its extractor, and on every incident of divorce and its extract.
And the tax extended to the authorized ones, so a tax was imposed on notaries for every marriage, divorce, return, or ratification contract that was issued, and the matter also came to imposing a tax on Egyptian travel tickets abroad.
And last June, Sisi issued Law No. 83 of 2020 imposing a tax on developing the state’s financial resources, which includes introducing fees for sports players ’contracts and technical equipment, sports company licenses, mobile devices and related accessories.
Fees were also imposed on all types of iron, animal food, pet birds, and all types of gasoline, as well as tobacco tax, and internet services.
The law also provides for an increase in the amount of the development fee imposed on the extraction of each official copy of the documents from the Real Estate Registration Authority.
Last July, the House of Representatives (Parliament) Plan and Budget Committee approved a draft law amending some provisions of the Radio and Wireless Equipment Fee Law, which provides for an annual tax of 100 pounds on anyone who owns a radio receiver in his car.
Tax legality
The remarkable statements made by the tax authority official stated that they violated the constitution that prohibits the creation, amendment, and exemption of taxes except by law, and successive tax laws did not stipulate that illegal activities be subject to income tax.
In that, the former parliamentarian, Dr. Ezz Al-Din Al-Koumi explained that it is not permissible to impose taxes without referring to Parliament to enact legislation.
He added to Al-Jazeera Net that the current system controls all legislative, judicial and executive powers, and even subjected the supervisory agencies under its shadow, considering that what (the system) is doing is a kind of bullying practice against the law and the constitution.
Al-Koumi considered the last governmental step to legalize the sale of drugs and weapons and the practice of prostitution, stressing that there is no way for public objection to what the regime is doing.
The inadmissibility of the application
The economist, Dr. Abdul Nabi Abdul Muttalib, believes that talking about applying taxes on illegal business is illogical, and it is also unconstitutional.
He told Al Jazeera Net that subjecting the criminal activities to the tax base, and discussing the person carrying out these criminal activities; It is an explicit recognition of the state’s approval of these activities, and that it is part of the income-generating economic activities, even if it does not recognize its legitimacy, or analyzes its practice.
"The drug dealer may be sentenced to death or life imprisonment ... so why would he admit that he engages in these criminal activities? Until the state collects a tax and thus facilitates the death sentence or life sentence?"
Abdel-Muttalib added that those involved in an illegal act are impossible to admit or admit to carrying out this activity, and he will insist on denial, concluding that talking about taxes in this field is nonsense without any scientific basis.
The economist did not find an explanation for the state resorting to imposing a tax on illegal business despite the law permitting the possibility of confiscating the funds of outlaws.