Egypt’s New Constitution Will Stipulate Progressive Taxation

The head of Egypt’s 50-Member Committee tasked with amending the 2012 Constitution, Amr Moussa, said Saturday that a progressive taxation system has been approved and will be included among the constitution’s articles.

Moussa was outlining the most important articles in the constitution’s final draft, which will be subject to final voting Saturday and Sunday.

“After voting, the constitution final draft will be referred to the president to ratify,” Moussa added.

Last week, Finance Minister Ahmed Galal stated that progressive taxation was a way to achieve social justice, but that there are practical and technical difficulties to implementing the new system in specific levy categories, such as sales and stamp duties.

Galal added that it would be hard to distinguish between citizens in these areas.

Progressive taxation has been raised many times since the January 2011 uprising, with social justice campaigners calling for high-earners to contribute more to the state.

Some experts and business owners, however, prefer to increase state revenues via a value added tax (VAT), corporate taxes and property tax, which remains to be implemented, rather than shaking up income tax, in order to avoid spooking investors.

Proponents of progressive taxes, however, argue that big business in Egypt pays low taxes compared to counterparts elsewhere in the world, thus depriving the state of much needed revenue to spend on social services and infrastructure projects.

Source: Ahram Online