Egypt Tax Authority Pursues International Standards For Improved Taxpayer Interaction

August 16, 2023


The government has been on a mission to update Egyptian Tax Authority (ETA) operations to meet international business-related standards. “We have always had plans to improve our interaction with all taxpayers in Egypt,” said Atef Hamdy, head of ETA’s Joint Stock Companies Tax Office, at an AmCham Egypt meeting in March. “This time, our goal is to meet international benchmarks in advanced economies.”

That target would come by making ETA an entirely digitized authority when dealing with taxpayers, audits, and tax-related submissions. “Such automation will benefit everyone,” said Hamdy. “Taxpayers could access all our services from anywhere, though we still have physical offices for those who prefer them. Our strategy has helped revenues increase, evasion cases drop, and the taxpayer base increase.”

The new ETA

As with new ideas, employees and even taxpayers resisted the ETA’s transformation. “That was the first challenge we faced,” said Hamdy. “I believe we have now crossed that obstacle and see that the ETA can contribute to attracting FDI.”

One benefit of ETA’s upgrades is the authority can audit a company’s tax filing within 24 hours versus weeks under the old system. “We are seeing a lot of companies increasingly willing to use the automated system,” Ashraf El Zayat, head of ETA’s Large Taxpayer Center (LTPC), told AmCham Egypt in March. “We have also seen record-low evasion.”

The ETA’s strategy should ensure no unsolved problems are in the system while under development. “If we don’t catch issues in the development phase, they would be increasingly hard to solve once the system is up and running,” El Zayat said.

The ETA’s strategy is twofold. The first is deciding on a slow and steady implementation of the new automated solutions — bit by bit on a limited sample of taxpayers. “Our aim is stability and security,” El Zayat said. “Therefore, our sample didn’t cover all the ‘large taxpayers,’ but only a handful of … companies nationwide.”

The other aspect is the creation of hybrid complaints and escalation systems (combining automation and human intervention) to ensure the ETA can resolve problems and update the system if needed in the shortest time possible.

The ETA’s strategy is to ensure all employees are familiar with all of the ETA’s latest laws, processes, and procedures. El Zayat said. “We get complaints from outside the LTPC. I don’t know who [those companies] are and which set of laws applies to them. But I need to give them the correct reply or at least direct them to the correct department.”

The other step is to increase the size of the ETA and dedicate more staff to individual functions and departments. El Zayat said, “It starts with the front-end office meeting with the taxpayer to tackle his problem, transferring it to the back-end office if the problem is complicated or related to the system.”

According to El Zayat, that has enabled the ETA to respond to 85% of complaints within 24 hours. Almost 10% are resolved within a week, while the rest are almost always related to the system. “It also ensures no bias when dealing with those problems.”

In 2023, Hamdy said they are drafting new laws and regulations “to keep up with the ETA’s digitization and digital transformation.” They won’t change policies, such as tax rates and other provisions. Instead, they focus on “leveraging the benefits of digitization,” Hamdy said. “That would allow the ETA to enter the next phase of its digital transformation journey.”