The Egyptian government has submitted a bill to the Parliament in order to amend a provision in the Unified Tax Procedures Law. The draft stipulates that a second paragraph should be added to the text of article 178 of the Unified Tax Procedures Law No. 206 of 2020, which reads as follows: “The provisions of articles 140 and 142 of the Central Bank Act and the banking system, No. 193 of 2020, shall not prejudice the disclosure of data in banks for the purpose of exchanging information in accordance with the provisions of international tax agreements in force in Egypt.”
In 2016, Egypt joined the Global Forum on Transparency and Exchange of Information for Tax Purposes established by G20 and OECD. The Global Forum on Transparency and Exchange of Information for Tax Purposes is the leading multilateral body in the world that carries out the work related to transparency and exchange of information for tax purposes. With 165 members, the Global Forum’s mission is ensuring a rapid and effective implementation of the standards of transparency and exchange of information for tax purposes, while focusing on two internationally recognized standards: exchange of information on request (EOIR) and automatic exchange of financial account information (AEOI), aiming to end bank secrecy.
Bank secrecy protects the confidentiality of financial information of individuals and legal entities, as all banks have an obligation to protect all their customer’s affairs and treat them as confidential. However, permitting governmental authorities to access bank information for certain law enforcement purposes (such as money laundering), can greatly improve the ability of tax authorities to effectively administer the tax laws enacted by their parliaments. Most countries permit tax authorities to obtain access to bank information through an exception to the general rule that establishes the confidentiality of bank information. Other countries only limit such access to situations where there are criminal proceedings or Tax Fraud. For instance, some countries allow obtaining bank information by the judicial authorities when tax fraud is suspected, while other countries may obtain bank information only if a criminal proceeding is pending.
As confirmed by The Egyptian Tax Authority, the proposed legislative amendment to the Unified Tax Procedures Law does not affect the confidentiality of bank accounts for Egyptians. It is only related to the exchange of information with foreign tax authorities and not with the Egyptian Tax Authority for local purposes.