Egypt to collect taxes from banks on debt instruments quarterly

CAIRO – 21 March 2019: The Egyptian government will collect taxes from banks on their holdings of treasury debt instruments quarterly rather than monthly, a senior government official told Enterprise.

This comes in accordance with the new tax treatment of treasury bills and bonds issued in February, as part of the amendments to the Income Tax Law, which aims to separate the proceeds of the treasury bills and bonds in an isolated container.

The source added that the first tax collection according to the new tax treatment will be in May, indicating that the amendment of the maturity date was intended to ease the burden on banks.

In November, the Cabinet approved a bill amending certain provisions of the Income Tax Act, allowing the separation of proceeds from the public treasury bills and bonds into a separate pot from the rest of the income.

On a different note, the source said that the government is working with the Central Bank of Egypt (CBE) to encourage greater activity on the Egyptian Exchange’s (EGX) secondary bond market and allow bonds to be traded in the EGX.

He clarified that this move will raise the treasury flows from taxes by LE 15-20 billion.

Minister of Finance Mohamed Ma'it revealed earlier that the reason behind the financial treatments of T-bills’ taxes is that it is one of the rights of the treasury.

Financial modifications on T-bills save treasury rights: Min.

CAIRO-2 December 2018: Minister of Finance Mohamed Ma'it revealed the reason behind the financial treatments of T-bills' taxes, saying that it's one of the rights of the treasury. Ma'it notes the share of the treasury from the taxes wasn't collected before.

Egypt targets an average interest rate on the government debt instrument of 14.7 percent in the current budget, compared to an expected average of 18.5 percent in 2017/2018 budget.