OCI In Talks To Pay EGP 1.2 Bln Tax Dues: Sources
Sources near from Orascom Construction Industries – OCI (OCIC.CA) said the firm is planning not to pay the Tax Authority (TA) more than EGP 1.2 billion. This comes amid the intensive negotiations which is being held between OCI and the TA on reducing the EGP 14 billion tax evasion dues.
The source has noted that the disputes erupted when the TA’s Research Department had showed interest to review OCI’s sale of Orascom Building Materials Holding to French Lafarge in 2008. The sources added: “The department has found out that OCI’s deal with Lafarge has been concluded on acquiring more than 50% of securities. Therefore, the deal was based on acquiring assets instead of securities, although it is quite normal to include securities to the assets’ value.
TA’s Research Department said OCI is not subject to the tax exemption of the Article No. 50, Paragraph 8 which states that the output of selling and buying stocks is tax exempt. Accordingly, the department sees that OCI has evaded tax.
Amwal Al Ghad had published on October 10th that tax authority sources informed the newspaper that it had called Onsi Sawiris alongside his son Nassif Sawiris to start interrogations regarding OCI’s evading to pay EGP 14 billion tax dues to the state.
The sources further mentioned that the selling deal of OCI’s Orascom Building Materials Holding to French Lafarge in 2008 has been reviewed referring that the deal has violated the law leading to tax fraud.
It is worth mentioning that OCI sold in 2007 its entire stake in Orascom Building Materials Holding (OBMH) to French Lafarge at $ 12.9 billion.
The tax sources added that OCI had founded Orascom Building and had listed it in the EGX for a short while, transferring to it the Lafarge deal valued at EGP 71 billion.
On the other hand, OCI informed the EGX on Monday that the capital gains from selling its entire stakes in the EGX-listed Orascom Building Materials Holding to Lafarge are tax exempt.
Derwaza further stated that OCI alongside its subsidiaries always submit the annual tax returns and pay the tax dues on time.
President Morsi mentioned during his speech on the occasion of 6th October Victory that Egypt is owed about EGP 100 billion by five companies adding that the state is in talks with these entities to have its dues. The President clarified that some of these dues arose from financial irregularities or tax evasions.
