Egypt Enacts Whistleblower Protection Laws to Combat Tax Evasion

In a significant move to safeguard tax revenues from evasion and avoidance practices, Egypt’s tax legislator has introduced penalties for tax evaders and incentives for whistleblowers who report such behavior. This legislation aims to protect the country’s tax community from corruption and any actions aimed at evading or avoiding taxes.

The Legislative Journey

The legislative journey began with Article 133 of Law No. 91 of 2005, which underwent multiple amendments across four stages until the issuance of Unified Tax Procedures Law No. 206 of 2020 and Law No. 30 of 2023. The latest law outlines financial incentives for whistleblowing tax evasion.

Incentives for Whistleblowers

Under Article 11 of Law No. 30 of 2023, a portion of late payment or additional tax, not exceeding 10%, will be distributed among informants and their assistants involved in detecting or reporting tax evasion, excluding authority employees. This incentive becomes due upon the taxpayer’s payment of the tax.

Tax Evasion Methods and Penalties

The law identifies various tax evasion methods, including:

• Providing false information
• Hiding financial records
• Forging documents
• Concealing taxable activities

Anyone evading tax payments faces imprisonment ranging from six months to five years, along with a fine equivalent to the unpaid taxes.

Resolving Tax Evasion Cases

Tax evasion cases can be resolved through reconciliation, which involves submitting a request for review by the competent authority. The compensation value varies depending on the stage of tax evasion:

• First stage: 100% of the tax liabilities
• Second stage: 150%
• Third stage: 175%

Conclusion and Future Outlook

In conclusion, the adoption of penalties for tax evasion and provision of incentives for whistleblowing underscores Egypt’s commitment to safeguarding tax revenues and upholding the integrity of the tax system. The country demonstrates its dedication to combating tax evasion through initiatives like Law No. 30 of 2023, which aligns with international standards and economic realities.

These measures not only serve as deterrents against fraudulent tax practices but also encourage collaboration in identifying and addressing instances of tax evasion. By prioritizing transparency, accountability, and compliance, Egypt aims to cultivate a tax environment that fosters fairness and sustainability in economic growth.

Andersen Egypt: Your Partner for Tax Compliance

With Andersen Egypt, you can rest assured that your tax matters are handled with precision and care, ensuring compliance with Egyptian laws and regulations. Contact us today at info@eg.Andersen.com or fill out the form on our website to learn more about how we can support you.