This is one of the very few times I write not as Editor-in-Chief but as Chairman of the Board of a journalistic corporation. What drove me to do so was news circulated on 27 May 2022 under the title: “New tax relief to support economic activity”. The details read that Finance Minister Mohamed Maait said that the Ministry was looking into drafting a bill that would allow partial waiving of the overdue charges and additional tax on the taxes determined and collected by the Egyptian Tax Authority, provided the taxpaying or tax obligated entity pays before 30 June all the taxes it owes, regardless of the type of tax or the payment deadline. Mr Maait said that the purpose of such a move was to mitigate the negative impact of the current global crisis caused by the severe inflationary after-effects of COVID-19 pandemic, and the Ukraine crisis as well. It should also encourage investment, and stimulate the production, industrial, and export sectors. He stressed that the new bill would work in favour of taxpayer entities and those under tax obligation, by avoiding problems incurred in applying previous tax overdue laws.
The Finance Minister’s declaration opened a door of hope long awaited by many floundering production and economic entities that have reached the point where their revenue can ill afford paying both salaries and government dues. Prominent among these have been media and journalism firms that—as testified by the Supreme Council for Media Regulation—have been tormented by a growing negative gap between revenue and expenses, which has made it impossible for them to meet financial obligations on time.
If some production or economic entities have suffered losses on account of their inability to achieve good sales, this has mostly been a one-time problem that was later surmounted. In case of journalism firms however, among which is Watani Printing and Publishing Corporation, the costs and expenses of publishing have over the last years steadily risen, whereas the revenue has regularly fallen, resulting in a widening gap that has affected their ability to pay their obligations to their staff and the government.
Given that Watani corporation is experiencing the negative revenue-expense dilemma first hand, I would like to shed light on the quandary we have been facing, which has made us in dire need of the tax relief mentioned by the Finance Minister.
As our revenue fell beyond the ability to pay the salaries of staff in addition to government dues, we had to give priority to paying salaries, hoping that there would be in some near future sufficient cash flow for us to pay our dues to the government. Our situation epitomised the glaring difference between late tax payment and delinquency; our tax dues were clearly included in our annual statement, meaning we were late on payment, whereas they would have been concealed had we planned delinquency.
Once it was possible to secure funds to pay the overdue taxes that had not been paid owing to severely reduced revenue, we promptly did that, meaning there can be no shadow of doubt of delinquency.
If the annual statement of a firm, a statement authenticated by registered charted accountants and auditors, shows losses for successive years, that firm ought to be afforded measures that would help it recover from floundering instead of strictly applying the law which would then lead to nothing but ruin and bankruptcy.
It is thus obvious what a window of hope the Finance Minister’s declaration has opened for us and equally for many others, by announcing that once all overdue taxes are paid before 30 June 2022, penalties—or part of them—would be waived.
Thank you, Minister of Finance. Your announcement has ensured that the government is not out to collect tribute taxes to the detriment of production and economic activity, but would support firms to overcome their difficulties and to remain the treasured producers and employers that they are.
Watani International
3 June 2022
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