‫اسم المادة (‪)Subject‬‬
‫الماليه العامه و الضرائب‬
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‫عنوان البحث (‪)Research Title‬‬
‫‪VAT – EGYPTIAN GOVERNMENT SPENDING‬‬
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‫‪ ‬اسم الطالب (رباعى‪ ،‬بالمغة العربية)‪ :‬مازن حمدي عبد السالم‬
‫‪ ‬رقم الجموس‪30776 :‬‬
‫‪ ‬الرقم القومــى‪:‬‬
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‫‪ ‬الشعبة‪ :‬اللغه االنجليسيه‬
‫‪ ‬الفرقة‪ :‬الثالثه‬
‫‪ ‬العام الجامعى‪2019-2020 :‬‬
‫جـــزء خـــاص بالكنتـــرول‬
‫(ال يكتب الطالب فيو شئ)‬
‫الرقم السرى‬
‫المراجعة‬
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‫تقييم البحث‬
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‫‪0‬‬
)ً‫جزء خاص بالكنترول (ممنوع الكتابو فيو نيائيا‬
‫تقييم البحث‬
‫الرقم السرى‬
...........................
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)‫بيانــــــات الطالــــــب (يقوم الطالب بنفسو بملء ىذه البيانات‬
‫ اللغه االنجليسيه‬:‫الشعبة‬
‫ الثالثه‬:‫الفرقة‬
9191/9102 :‫العام الجامعى‬
‫ ماليه عامه و ضرائب‬:)Subject( ‫اسم المادة‬
VAT – EGYPTIAN GOVERNMENT SPENDING :)Research Title( ‫عنوان البحث‬
INTRODUCTION
taxes area unit the money that a government gathers from the people that live in a very town
,state ,or nation. the government . utilizes that money to buy for what it would like
governments collect taxes for many reasons. the foremost vital one is to buy for services . one
.example of those services is also a military or cops to protect folks
.another example of state services is building roads as ancient Romans did
businesses some times pay higher taxes if the product they produce area unit unhealthy
in some way (1)
A VAT (VAT), noted in some countries as a product and services tax (GST), might 
even be a form of tax that is assessed incrementally. it's levied on the worth of a
product or service at every stage of production, distribution or sale to the best shopper,
except wherever a business is that the highest shopper which can reclaim this input
VAT basically . price. it's nearly like and is usually compared to a excise tax
compensates for the shared service and infrastructure provided throughout a selected
neck of the woods by a state and funded by its taxpayers that were utilised among the
.elaboration of that product or service
1

Not all localities need VAT to be charged and exports area unit usually exempt. VAT is
sometimes enforced as a destination-based tax, wherever the speed relies on things of the
client and applied to the sales value. The terms VAT, GST, and so the additional general
.consumption tax area unit generally used interchangeably
VAT raises a few of fifth of total tax revenues each worldwide and among the members of the
Organisation for Economic Co-operation and Development (OECD).:14 As of 2018, 166 of the
193 countries with full UN membership use a VAT, together with all OECD members except
.the United States ,:14 wherever several nations use a excise tax system instead
There area unit 2 main strategies of hard VAT: the credit-invoice or invoice-based
methodology, and so the subtraction or accounts-based methodology. victimization the creditinvoice methodology, sales transactions area unit taxed, with the client familiar of the VAT on
the dealing, and businesses could receive a credit for VAT paid on input materials and
.services
The credit-invoice methodology is that the foremost typically utilized methodology, utilized by
.all national VATs other than Japan
Using the subtraction methodology, at the best of a news amount, a business calculates the
worth of all ratable sales then subtracts the add of all ratable purchases and so the VAT rate
.is applied to the distinction
The subtraction methodology VAT is presently solely utilized by Japan, though subtraction
methodology VATs, usually victimization the name "flat tax", area unit a district of the
.various recent tax reform proposals by United States politicians
With each strategies, there area unit exceptions among the calculation methodology for sure
product and transactions, created for either pragmatic assortment reasons or to counter tax
fraud and evasion (2) (3) (4)
Research items:
1-Dfine VAT and taxable persons
2-Determine taxable commodities and services
3-identify tax chargeable event of VAT on commodities and servies
4-determine the value subject to VAT for local and imported commodities and services
5-determine cases of tax deduction and tax refund
1-define VAT and taxable persons:
The first definition: the value-added fee is an tax imposed on total spending or total
consumption and applied to operations that are industrial, commercial, or literal.
2
The second definition: that the VAT may be a tax on consumption that's collected at every
stage of the economic cycle and applied consistent with the quantity of consumption, in other
words the worth that the buyer pays to get goods and services is attached.
The third definition: The VAT may be a sort of tax on spending that the state uses in its quest
to extend its financial resources and is imposed on the rise within the value of products and
services and performed by the buyer , after it's transferred to the entire within the worth of
materials or services, While the state acquires it at the extent of the producer or service
provider.
From of these definitions we draw a comprehensive definition where the value-added fee is
taken into account one among the foremost important indirect fees imposed on the buyer and
concerns operations of an industrial, professional, and commercial nature, and it's the
responsibility of the buyer , not the institution, the latter of the state treasury because it plays
the role of mediator in Collecting and paying the fee to the Tax Administration.(5)
Value-added tax features:
1-A real tax, because it pertains to income, by using it in consumer operations for goods and services.
2-An tax paid to the general public treasury, the buyer doesn't do so directly despite the very fact that he's the important bearer of it, but the institution because the legal bearer is that the
one that guarantees the assembly and distribution of products and services.
3-The tax may be a value because the fee for value added has dimensions with the worth of the merchandise and not with its quality or quantity.
4- A tax supported the payment of installments. In each installment, the worth -added fee relates only to the value associated with the merchandise , at the start of every production
cycle and therefore the general tax costs need to do with the asking price of the buyer.
persons subject to the VAT:
The characteristic of the drawing leads to an absolute investigation of operations with a
billboard or free commercial industrial activity, in other words it's taxable. every one who
performs these tasks within the field of applying value drawing whether these actual
operations are available or exempt and therefore the persons subject to drawing on the
divided value are divided into:
First: the producers:
The word "Producers" means
1.Natural or legal persons who mainly or secondarily extract or manufacture products .
2-Natural or legal persons who actually hold the manufacturer’s premises to hold call at .
their factories or maybe outside them within the sort of works associated with making
products or maybe outside them within the sort of works associated with making products
3
and their final commercial packaging, like packaging or sending these products, whether or
.not they are sold under a mark or a fee from Do these operations or not
3-People or companies who believe other.
Second: wholesale trade:
The term "wholesaler" means the merchants who sell either to other merchants so as to resell
or with an equivalent price or quantity terms for institutions, investors, public or private
groups.
Third: Retailers affiliated with the important profit system
The term "retailers" means merchants who perform retail operations, but retailers subject to
the legal system are exempt from the sector of applying value-added fees.
Fourth: subsidiary companies:
A subsidiary is taken into account to be a subsidiary of any company that's subordinate to a
different company or under its management by virtue of the very fact that it's getting used by
one or more branches of this company.(6)
2-determine taxable commodities and services:
Taxes on value added are subject to processes that are industrial, commercial and literal in
nature, which are administered by people as was common or accidental, and operations
subject to VAT are divided into value added into two categories:
1-Taxable goods and services are compulsory
2-Optional goods and services
First: Goods and services that are subject to a VAT tax:
1-Transactions associated with movable property :
* Sales and deliveries made by producers
* Completed operations as per wholesale conditions by importing merchants
* Wholesaler operations
*Retailers Activities apart from the operations achieved by taxpayers and affiliated with the
penal system
*Sales Operations by the main areas
* Activitiesof Multiple trade
2- Operations associated with land
4
*Real Estate Works
*Land segmentation Operations for construction and sale by landowner
* Sale of land or shops
3-Deliveries to themselves or for themselves related to
* Transfer values (fixed values)
*Other immovable property, when it doesn't contribute to the performance of operations .
.subject to a fee for value added or exempt
4-Service delivery
*Goods or person transfers
* Manufacturing works
* Artistic parties, games and entertainment of all types* Operations administered by insurance companies and banks
Second: Operations subject to optional tax on value added
* within the case of export
* Petroleum companies
* Institutions taking advantage of the exemption purchase system
3-identify tax chargable event of VAT on commodities & services:
It is done consistent with the VAT by subtracting the worth of the inputs from the worth of
the great or service when selling then multiplying the result by the rate . If the worth of the
commodity at the time of sale is 1500 Egyptian pounds, the worth of production requirements
is 300 Egyptian pounds and therefore the rate is 15%, then the added value equals 1500-300 =
1200 x 15% = 180 Egyptian pounds.
4-determine the value subject to VAT for local and imported
commodities and services:
The tax-generating event is that the event that generates tax-obligated debt toward the
treasury, and therefore the event-creating event varies counting on the sort of transactions
achieved, whether it's made in income upon import or export
*in local
collection of the worth
5
-added fee arises once the physical
or legal distribution of the commodity takes place, but the function of selling drinking water
through total or partial collection of the commodity
*When importing
The juvenile creating the drawing is made by the customs of the products or commodities,
and therefore the one that owes the value-added fees is then authorized by the customs
5-determine cases of tax deduction and tax refund:
1-A tax previously paid or charged for goods and services that are exported abroad, whether
issued in its condition or included in other goods or services, to not exceed the credit balance
2-The tax collected by mistake or that was paid until the exemption procedures are fulfilled
3-The credit balance that has been passed for quite six consecutive tax periods after verifying
the validity of this balance
4-The previous tax paid on machinery and equipment utilized in the assembly of his goods or
the performance of a taxable service, when submitting the primary tax declaration apart from
buses and passenger cars, if their use is that the authorized activity of the power
5-A clearing shall be made between what's thanks to the registrar with the authority and
what's thanks to him and therefore the duty to perform consistent with any law applied by the
authority or any of the voluntary interests affiliated to the Ministry of Finance on the date of
the supply of its conditions (7)
Second:public finance
Research items:
1-the different components of the government spending specified in the budget
2-the trend and values of those components during the specified period
3-the funds allocated to education and their effect
1-the different components of the government spending specified in
the budget:
Government spending or expenditure includes all government consumption, investment, and
transfer payments. In worth accounting the acquisition by governments of product and
services for current use, to directly satisfy the individual or collective wants of the community,
is classed as government final consumption expenditure. Government acquisition of product
and services meant to form future advantages, like infrastructure investment or analysis
outlay, is classed as government investment (government gross capital formation). These 2
6
varieties of government outlay, on final consumption and on gross capital formation, along
represent one in every of the most elements of gross domestic product
Government spending as a percentage of gross domestic product, in Egypt, according to the
Economic Freedom Index 2011, by the Heritage Foundation and the Wall Street Journal Is
34%.
Government expenditures on goods and services to satisfy the individual or collective needs of
community members are directly called government final consumption expenditures. it's the
acquisition of products and services from national accounts and therefore the use of the
income account to directly meet individual needs (individual consumption) or the collective
needs of community members (group consumption)
Health care and medical research and National defense spending
also Government spending that aims to make a future benefit like investment in
infrastructure or research spending is named fixed capital formation or government
investment, which usually represents the majority of state spending. the government produces
goods and services (using government manpower, fixed assets, goods, and brokerage services)
or by purchasing goods and services from market producers. theory defines investment
because the quantity of products for each unit of your time that's not consumed but are going
to be used for future production (i.e. capital). like building railways or factories
This is with regard to public spending at the macro level. As for public spending at the level of
sectors, it is worth noting that the relationship between increasing public spending on a sector
and changing levels of performance and efficiency is difficult to confine to one form, especially
.with regard to the health and education sector
Could close to Education sector, Accreditation in measuring his performance On the
education index for everybody (EDI) . it's a composite index it's calculated by UNESCO with
the aim of measuring Educational system performance in light of the most goals entrusted to
realize
However, it had been noted that the amount of paying efficiency recorded within the case of
mainly counting on grants and aid are usually above those recorded within the case of
dependence on natural resources This is due to the fact that the aid is accompanied by a set of
conditions set by the donor countries, which often relate to correcting deficiencies and
ensuring that such aid is allocated and disposed of in an efficient manner, and it may be
accompanied by sending experts to provide advice and supervision on how the aid is spent
From the foregoing, we conclude that the government uses a specific percentage of the
domestic product to spend on the various sectors to contribute to its development and
improvement, or even its financing, to be able to provide services to citizens and among the
most important of these sectors: education - health care - investment spending in the field of
infrastructure - purchases of goods And services - spending on support and social benefits (8)
2-the trend and the values of those components during the
specified period:
7
To know the amount and value of government spending on those sectors during the period
from 2000 to 2010 we will divide that period into three time periods each of four years, due to
the lack of available information on the level of spending in that period and its inconsistencies
and difficulty in obtaining it and therefore we will clarify an average Spending on each sector
in each of the three periods (2000-2004), (2004-2008), (2008-2012)
(9)
variable
Value (in millions of Egyptian pounds)
Average first
period (20002004)
Average for the
second period
(2004-2008)
Average for the
third period
(2008-2012)
Total public spending
116384,3
151848,3
178136,1
Public spending on
education
Public spending on
health care
Spending on
infrastructure
Spending on
purchases of goods
and services
Spending on social
support and benefits
Table (1)
20384,7
19629,2
23130,0
5470,8
7035,6
8473,9
15298,1
16785.2
22003,6
10911,7
12014,7
47078,25
54257,4
8684,0
32723,3
From the previous table, it is clear that the amount of total government spending rises in each
period from the previous period, just as spending in most areas rises in each period, except
that some areas have decreased in the amount of government spending, such as education in
the second period of (2004-2008)
3-the funds allocated to education and their effect:
years
2000/2001
2001/2002
2002/2003
2003/2004
2004/2005
2005/2006
2006/2007
2007/2008
2008/2009
2009/2010
Table(2)
The amount of spending (in million pounds)
18609.8
20425.5
22523.7
24692
25674
25490
27559
33482
43398
49049
(10) (11)
8
From the above in the previous tables (1) (2) it is clear that the amount of spending on the
educational process and in the education sector in general has decreased in the period from
2004 to 2007 from the amount of total spending in the country, which affected the quality of
the educational system in Egypt and led to a decline in the system Educational in the
international ranking.
As we mentioned earlier, the quality of the educational system is measured by relying on the
Education for All Index (EDI), which includes an index to measure the quality of the
educational system, which measures the quality of the educational system based on the
indicator for the percentage of students who continue in the educational process until the fifth
grade, but this percentage does not rise I mean, necessarily, the high quality of the
educational system, it is possible that there are those who organized until after the fifth grade,
but they did not receive the amount of education that helps them read, write, or perform any
calculations due to the low quality of the educational system due to a lack of spending on it
This has affected the quality of the educational system. If we look at the quality index of the
educational system in 2008/2009, we will find that it is 2.6 points, and that the ranking of the
educational system in Egypt has reached number 123, and even after increased spending on
the educational system in Egypt, it is still suffering. In 2009/2010, the index fell again to 2.5
points, and the educational system in Egypt reached No. 131 on the level of countries. In
2010/2011, the decline continued to 2.3 points in the quality index of the educational system,
and Egypt reached No. 137 on the world level. (12)
9
Summary and conclusion:
All of the above can be summarized in several points:
*FIRST TAXATION:
1- Taxes are one of the most important sources the country has used since ancient times to
finance its economies
2-Value added tax is a tax imposed on the amount of consumption and on industrial and
commercial operations
3-People subject to VAT are: the producers-the wholesalers-retailers-subsidiary companies.
4- The state determines the goods and services for which VAT is imposed
5- VAT can be refunded if they were collected by mistake or were previously collected
* Second public finance:
6- Government expenditures are a percentage of the national GDP
7- Government expenditures are in several sectors such as: education - health care –
infrastructure.
8- The percentage of government expenditures from the national income in Egypt during the
period from 2000 to 2010 was marked by an increase
9- There are many sectors that have benefited from this increase, and some sectors have been
affected, such as the education sector
10- The quality of the educational system in Egypt in the period from 2007 to 2011 has
deteriorated due to the low percentage of government expenditures on this sector in the
period from 2004 to 2008
11- In order to restore and raise the quality of the educational system, government
expenditures in that sector must be increased
10
Sources and references:
1- What are taxes? [electronic resource] / Lynnae D. Steinberg. • 2016
2-. Consumption Tax Trends. Secretary-General of the OECD. 2018 .1
3-Bickley, James M.. Value-Added Tax: A New U.S. Revenue Source 28 June 2016
4-Egyptian Knowledge Bank (EKB)
5- Khalisi Reda, the Algerian tax system, Dar Houma for printing, publishing and
distribution, Bouzarra
6- Khalisi Reda, the Algerian tax system, Dar Houma for printing, publishing and
distribution, Bouzarra , page(133)
7 A guide for tax refund and exemption from it in light of the provisions of the value-added
tax law issued by Law No. (67) of (2016)
(8),(9)- National Planning Institute, measuring the efficiency of public spending
In Egypt and proposals to improve it
10-from year 2000-2003: (Statistical year book, Egypt, September 2009 from:
http://www.capmas.gov.eg/pdf/book_year/2009.pdf
11-from years 2003 to 2010 : Statistical year book, Egypt, September 2013 from:
http://www.camps.gov.eg/pdf/electronic%20static%20book2013/arabic/weather/untilited1/we
ather.aspx
11