Egypt's cabinet approves draft tax settlement bill amid IMF talks

Wednesday 10-08-2016 08:14 PM

Egyptian Prime Minister Sherif Ismail, REUTERS

By Reuters

CAIRO (Reuters) - Egypt's government approved a draft bill that would settle tax disputes, the cabinet said in a statement on Wednesday, a move aimed at restoring confidence with investors amidst ongoing talks with the International Monetary Fund.

Over 6,000 tax dispute cases worth about 47 billion Egyptian pounds ($5.29 billion) are in the court system, in addition to 150 civil disputes, Deputy Finance Minister Amr al-Mounir said in a news conference.

"The draft bill is an important tool for encouraging voluntary upholding of the tax law and aims to expedite dispute settlement with investors as well as create a climate of trust between investors and the tax authority," the cabinet said.

The bill, which still has to go to parliament for approval before it becomes law, allows tax disputes to be settled by committees headed by experts who do not work for the tax authority.

The settlement process would start as soon as an investor submits a request to the tax authority. As soon as the request is made, court proceedings would be suspended for three months.

Cairo is in the midst of talks with the International Monetary Fund to secure a $12 billion three-year loan programme, and restoring investment confidence is key to sealing a deal it hopes will plug its funding gap and restore market confidence hit by an acute shortage of foreign currency.

Egypt is also seeking to push ahead with reforms, including VAT and cuts to electricity and petroleum subsidies that were begun in 2014 but put on hold when global oil prices dropped.

The economy has been struggling since a mass uprising in 2011 ushered in political instability that drove away tourists and foreign investors, both major earners of foreign currency. The turmoil has seen foreign reserves more than halve from some $36 billion before the uprising to $15.536 billion in July.


(Reporting by Ahmed Aboulenein; Editing by Toby Chopra)

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