Does the Egyptian market bear to open these tax practices?

Analysts and operators of the Egyptian stock market have criticized the Egyptian government’s move towards opening a series of tax practices in this moment. Days after Egypt’s finance minister, Mohamed Maait, announced the start of the capital gains tax implementation early next year, the tax authority returned to renew the crisis and talked about a tax on producers. of electronic content, or what is known as “YouTuber”.

Ahmed Abu Al-Saad, managing director of Azimut Egypt, believes that the current timing for the imposition of such taxes is inappropriate, and these are unfair taxes and will cause serious losses, both in terms of investments in bag, either in terms of investor fears, which are in sharp increase in this moment.

In a moment in which emerging markets are facing a severe bleeding wave due to the Evergreen Company crises, both within China and at the global market level, in addition to the decision of the Turkish Central Bank to reduce the interest rate, and instead of offering structures that favor the arrival of foreign investment, the government is moving to open difficult files and push investors to flee or raise their concerns.

A few days ago, the Egyptian finance minister, Mohamed Maait, confirmed that it is expected to start applying the capital gains tax at a rate of 10% on the operations of the Egyptian stock exchange starting next January 1st. The decision has sparked a state of controversy among analysts and dealer, especially as since the reopening of this dossier, the Egyptian stock market has started a wave of losses amid expectations that will continue to decline until new incentives appear.

On her Facebook page, an analyst from the Egyptian Association for Political Economy, Statistics and Legislation, Rania El-Gendy, expected the implementation of the capital gains tax to continue, as it had in previous years.

He said that most customers have been making losses for years, so how will this tax be calculated? He stressed that there is a fear of opening a tax file due to exaggeration in the calculation of the tax, either through an arbitrary assessment, as happens in direct investments or in the parallel economy.

He stressed that the decision will have negative repercussions, especially since the Egyptian stock market is the only market in the Arab region that records continuous losses in its main index, even as international valuation institutions praise the only Egyptian economy that has achieved growth rates. positive in the region, estimated at 3.6%, exceeds China’s growth rates.

As the market was barely absorbing the capital gains tax shock, the tax authority announced the imposition of a tax on electronic content producers, which sparked a state of widespread controversy among the pioneers of the sites. social networking.

Supporters of this approach see it as an important step in the context of the integration of the parallel economy into the official economy, but there are those who oppose the decision and see that it represents new burdens, both for the citizen and for the system of investments in Egypt generally.

A few days ago, the Egyptian tax authority reached out to bloggers, YouTube visual content creators and other content creators online, to open an income tax file. All content creators who earn more than EGP 500,000 per year will also need to register for VAT.

The head of the Egyptian tax authority, Reda Abdel Qader, had revealed that the e-commerce unit of the authority is working on the inventory, monitoring and registration of companies that do business through the sites web. He explained that the Ministry of Finance is closely following the Revenue Agency to make every effort to achieve fiscal justice by listing in the tax community more accurately, in particularly the transactions that take place through electronic platforms, and determining who does them, to include the informal economy in the formal system.

He pointed out that e-commerce is an updated form of marketing and sales imposed by changes in communication technology and new communication and the dependence on it has expanded. in unprecedented globally due to the Covid 19 pandemic. He pointed out that many countries describe any commercial transaction as e-commerce when Ownership of the Goods is transferred or the process of selling or performing the Service via the Internet or other electronic means.

He explained that there are 3 types of companies that carry out e-commerce activities: the first type are companies that consider e-commerce only one of various means of sale or distribution, the second type are companies that have been established and depend mainly on the sale and distribution of its products and services by electronic means. While the third type is represented by companies whose business is digital platforms to display sellers’ products on them and to facilitate comparison processes for buyers.