Tax Authority In Talks With OCI To Repay EGP 2 Bln

The Egyptian Tax Authority (TA) and Orascom Construction Industries – OCI (OCIC.CA) have agreed in principle during their meeting on Sunday over the Group’s EGP 14 billion tax evasion to reduce the amount to EGP 2 billion.

Senior sources from Egypt’s Finance Ministry told Amwal Al Ghad that the tax charges reduction is not final as there will be coming talks between the Tax Authority and OCI representatives which could result in further lowering.

The sources described the meeting held Sunday between Mamdouh Omar – Head of Tax Authority, and OCI representatives; KPMG Hazem Hassan and Ashraf Abdel Ghani Accountants and Tax Consultants as ‘cozy’ as it showed a genuine willingness to have a happy ending with the Group’s tax file.

The sources further noted that the Egyptian government is willing to put an end to the current conflict with the investors through making the most reasonable settlement offers. Through the settlement offers, the government would then finance the country’s substantial budget deficit, the sources added.

The government may accept to settle its disputes with the firms in return for paying EGP 2 billion or even less.

Furthermore, the sources said the Finance Minister Momtaz Al-Saeed and Prime Minister Hisham Kandil are following up the OCI’s case for its key influence over the foreign investments in the country.

The sources also noted that the initial financial estimates in the tax evasion cases always tend to be arbitrary and overvalued but after the reconciliation with the taxpayer and reviewing the financial statements, the amount of tax becomes much less. Moreover, the taxpayer usually prefer reconciliation through paying the tax dues and the compensations to resorting to the court in which the tax evasion fine would be doubled.