Introduction
contents:
• Definition
• Purposes of Taxation
• Major types of tax
• Development of the Egyptian income tax
• Law 91/2005
Definition
Tax :
a cash levy collected by the state from individuals and
establishments in accordance with determined rules with the
aim of financing public expenditures
Purposes of Taxation :
1. Financing government spending
2. Reduce gap between rich and poor
(Progressive tax system)
3. Reduce consumption of demerit Goods
(Examples include cigarette tax)
4. Control Inflation
5. Balance of payments
(increasing the tariffs will cause a fall in demand for the imported goods.)
6. Protecting local industries
Major types of tax
1.
2.
3.
4.
5.
Direct and indirect
Qualitative and unified
Personal and in-kind taxes
Proportional and progressive
Taxes paid directly by tax payer to tax department and
taxes deducted at source
Major types of tax
Direct and indirect :
Direct tax :
 tax in which the person who bears the tax is the one
who pays the tax
 as tax on salaries
Indirect tax :
tax in which the tax is transferred to another person
as sales tax
Major types of tax
Qualitative and unified :
Qualitative tax :
Tax imposed on each kind of income
separately
Unified tax :
Tax imposed on total incomes regarding their
sources
Major types of tax
Personal and in-kind taxes :
Personal tax :

tax that considers the family charge exemption
 As salaries tax
In-kind tax :
tax that don’t consider the family charge exemption
As sales tax
Major types of tax
Taxes paid directly by tax payer to tax department and
taxes deducted at source :
 Taxes paid directly by tax payer to tax
department :
As commercial tax and non
commercial tax
 taxes deducted at source :
As tax on salaries
Development of the Egyptian
income tax
5 stages for the Egyptian income tax development :
 Stage 1 : law 14/1939
 Stage 2 : law 99/1949
 Stage 3 : law 157/1981
 Stage 4 : law 187/1993
 Stage 5 : law 91/2005
Law 91/2005
• This new law is intended to follow the best taxation
bases and practices .
• It is intended to play the role of the primary axis
of taxation , administration and reform ,
meanwhile simplifying procedures .
Law 91/2005
The most significant features of
this law :
tax
legislation
Mutual trust
developing
Tax
administration
Tax justice
Balancing
various
objective
Law 91/2005
The new law is dependent on number of
principals :
Law 91/2005- features
• Eliminating family burden :
A. The reduction of tax price to 20%
B. Raising the limit of exemption to 5000L.E to the
benefit of natural persons
C. Simplifying tax treatment
D. 5 years exemption for the projects financed by the
social fund
E. 4000L.E personal exemption for salaries and wages
Law 91/2005- features
• Widening the tax exemption :
For the projects outside official scope by setting
disputes in a sound manner
Law 91/2005- features
• Simplifying procedures :
A. Authorizing citizen declaration as the basis of tax
declaration
B. Optional in advance payment to allow tax payers to
pay in advance till treatment is being settled at the
end of the year
C. maintaining the cancelled exemption for the projects
set up before the new law is applied
Law 91/2005- features
• Mistrust cases :
To encourage taxpayers to cooperate with the tax
authority:
A.Setting up independent appeals committees
B.Determining the taxpayer’s rights and extent of tax
authority
Law 91/2005
Salaries and the like
Income taxon
natural persons
Commercial and
industrial
Non commercial
Income taxes
according to law
91/2005
Real state wealth
partnerships
Tax on profit of
juridical persons
corporations