Central Bank of Egypt defends Secrecy of Bank Accounts

Head of the Tax Authority (ETA) of Egypt, Emad Sami, revealed on August 26th that an amendment to the Income Tax Act has been drafted to allow the Minister of Finance to access corporate bank accounts in order to help combat tax evasion, causing immediate reaction of the Governor of Central Bank of Egypt (CBE), Tariq Amer.

Tariq Amer responded strongly to the comments by Emad Sami, later the same day, saying that CBE would not accept, under any circumstances, a proposed amendment allowing the Finance Ministry to access bank accounts belonging to corporations or individuals, adding that the CBE will protect the confidentiality of customer accounts in banks.

Emad Sami explained, in a statement given to Reuters, that the amendment does not contradict the law governing the Central Bank or current judicial procedures. He stressed that the goal of this proposal was to reduce tax evasion and not all the accounts will be reviewed, but only those that provide unrealistic data. He added that Tax inspectors will be allowed to review bank accounts strictly with the approval of the Minister of Finance.

Responding to the severe storm of criticism from the leaders of the banking sector, Sami stressed in an official statement that ETA respects the law on bank accounts’ confidentiality, and that the secrecy of bank accounts is a guarantee for investors.

According to Ruqaya Riad, legal adviser to the Federation of Egyptian Banks (FEB), the possibility of making this amendment has been ruled out, considering the negative impact that it would have on the banking sector and the whole economy.

It is worth noting that Egypt seeks to grow its tax revenues by 4 percentage points of GDP (up from 14 per cent currently). A comprehensive amendment of the full tax law is expected next year, including more strict penalties for tax evasion.

Ali Najm, International Customer Relationship Manager
Email: ali.najm@eurofast.eu
T: (+357) 22699222

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