Cairo, 20 February 2025 (ECA) – The ECA office for North Africa concluded today a Capacity building workshop on the taxation of State-Owned Enterprises (SOEs) in the Cement and Food Processing Industries. The training was carried out carried out for the benefit of senior officials from the Egyptian Tax office, with the aim of increasing their capacity to conduct tax audits of State-Owned Companies under Law No. 159 of 2023.
The five-day workshop (16-20 February 2024) was part of a series of trainings held by the North African arm of the UN Economic Commission for Africa to help African countries make the most of domestic sources of financing as access to external borrowing and international aid are becoming increasingly limited.
So far, the trainings have enabled 27 Egyptian tax auditors to significantly improve their ability to carry out their mission; they have also laid a strong foundation for the 29 executive staff and officials in charge of auditing and reviewing the tax declarations of companies and governmental bodies, and have enabled us to develop a unified tax auditing framework in the newly established Large Taxpayers Centers, said Egyptian Tax Authority Commissioner Rasha Abdelaal.
This has been a significant achievement for the Egyptian Tax Authority which has a crucial role to play with taxes accounting for over 75 percent of the state's general revenues.
Egypt is currently home to about 105.9 million inhabitants including about 9 million migrants and refugees . The country’s economy is facing an adverse global economic context that has affected key sources of Government income including tourism and the Suez Canal. Despite these difficulties, Egypt has to dedicate significant budgets to social policies and SDG implementation: in its 2023-2024 budget, the government allocated around EGP 529.7 billion (USD 10.51 Billion) for social support and protection.
These constraints have forced Egypt to make difficult decisions including reducing infrastructure development budgets, floating the Egyptian pound and reducing subsidies for basic products and widening the tax base. To this end, ECA has organised a series of workshops for the benefit of the national tax authority to maximize tax revenues.
Since the project initiation in 2023, participants have upgraded their skills in areas such as tax auditing, the taxing of state-owned companies and of companies in the construction and real estate, tourism and hospitality, and transport and storage sectors. Egyptian tax officials have also been trained on topics such as tax evasion and tax risk assessments with regards to cross-border transactions.
The ECA training project has also contributed to the launch of several tax reforms in the country, including the unification, simplification and strengthening of the implementation of taxation processes such as the VAT and the income tax; the simplification of tax audit and refund processes; increased support for investors and simpler administrative procedures for taxpayers with incomes less than or equal to 20 million Egyptian pounds (approximately 400,000 US dollars).
“In line with ECA recommendations, the trainings aim to strengthen Egypt’s capacity to combat tax evasion and avoidance; improve the efficiency and transparency of the tax collection process; facilitate the integration of the informal economy; and increase tax collection, especially from large taxpayers,” explained Mr. Adam Elhiraika, Director of the ECA Office for North Africa.
The country has already embarked in measures to widen the tax revenues base, among which the discontinuation of tax exemptions for SOEs as per Law 159 of 2023, which is expected to generate at least 5 billion Egyptian pounds in 2025 (about USD 98.8 million), i.e. almost the same amount that allowed the extension of the “Hayat Kareema” programme to support a total of 5 million families in 2022-2023 (EGP 5.5 billion) .
Egypt is not the only North African country having to take such measures. This is why ECA is conducting similar workshops in other countries like Libya, Mauritania, and Sudan. For instance, the workshops in Libya have enabled the tax authorities to increase stamp tax revenues by 60 percent and corporate income tax revenue by 24 percent between 2022 and 2023. This is considered as a major milestone, given the quest of the Libyan government to diversify its revenues and reduce dependence on oil. In Sudan, where a pilot version of the project was conducted prior to the conflict, the national taxation authority (Sudan Taxation Chamber) managed to increase tax revenues from 1 to 5.4 percent of GDP between 2020 and 2022.
Over the last few years, ECA has been working on several projects in support to member countries’ efforts to improve their finances and ability to implement the Sustainable Development Goals. In addition to improving government finance, key aspects have included international advocacy work for a modernised, fairer international financial system for developing countries and middle-income countries, or aspects such as remittances as development levers in migrants’ countries of origin.
The ECA office for North Africa is currently working with six African countries to help strengthen the link between African diasporas’ remittances and national development. “There is significant potential in here: Between January and November 2024, Egypt’s 14 million strong expatriate community has sent home about USD $23.7 billion worth of remittances. This is almost four times the amount of foreign aid the country received in 2022, which shows the potential of remittances as a lever for development” said Elhiraika.
Media queries
Houda Filali-Ansary - Communications Officer
ECA Office for North Africa
E-mail: filali-ansary@un.g
Issued by:
Communications Section
Economic Commission for Africa
PO Box 3001
Addis Ababa
Ethiopia
Tel: +251 11 551 5826
E-mail: eca-info@un.org