November 28, 2021

Switching to electronic budgeting helps state handle internal, external challenges: Finance Ministry


26,000 importers have joined ACI system, and more than 164,000 ACIDs have been issued so far

Ehab Abu Eish, Deputy Minister of Finance for the Public Treasury, has said that the Ministry laid the foundations for digital transformation in its comprehensive concept, which includes re-engineering, simplifying, and automating procedures, in a way that integrates with the modernization of the legislative structure, and the development of the work environment.

This contributed to maximizing the economy, enhancing the governance of the revenue and expenditure system, maintaining a safe economic path, and meeting the development needs.

He noted that the state’s public treasury has become more capable of dealing with internal and external challenges by switching to electronic budgeting.

Abu Eish indicated that there is a new administrative structure for the Ministry of Finance, which contributes to raising the efficiency of public financial management in real time, and to the optimal utilization of the state’s public resources, explaining that the business community has helped us a lot in modernizing and mechanizing the tax and customs systems.

He added that projects to digitize the tax system have made us more able to integrate the informal economy into the formal economy, and achieve tax justice, without burdening citizens.

He explained that in 2021 the electronic income tax declaration system witnessed an increase of 11% compared to 2020, and the number of registrants in the electronic value-added declaration system had doubled compared to June 2018, and the number of value-added declarations had increased by 54% compared to June 2018. Revenues of VAT have also increased by 27% in the last fiscal year compared to fiscal year (FY) 2019/20, and the proceeds of value-added declarations during the first four months of the current fiscal year increased by 19.7%.

According to Abu Aish, about 15 million electronic invoices are issued per month, and that there are 5,000 companies that have joined the e-invoice system so far. It is targeted to reach 9,000 companies by mid-December 2021. In addition, 14 income tax and VAT offices will be merged into 10 offices by 26 December.

He explained that the e-invoice system will cover retailers by next April. The mandatory registration will take place gradually, starting with 600 taxpayers, which would strengthen the governance of the tax system, through the optimal use of technological solutions in the real-time follow-up of commercial transactions between financiers and consumers, in a way that helps achieve tax and competition fairness.

He added that more than 60,000 foreign exporters have been registered on the CargoX platform, and 26,000 Egyptian importers have been registered on the Advance Cargo Information (ACI) system for pre-registration of shipments, with more than 164,000 ACIDs have been issued so far. In addition, 13 logistic centres have been established covering 96% of Egypt’s imports. All customs outlets have been electronically linked to the ACI platform, in a way that contributes to the transition from a paper-based work environment to digital, and enhances the improvement of Egypt’s classification in 3 important international indicators: global competitiveness, doing business, and macroeconomic environment.

He pointed out that since May 2019, more than 3 million electronic tax and customs collection operations, with a value of more than EGP 1trn and a growth rate of 10%, and more than 23 million collection processes in government machines, worth more than EGP 128bn with a growth rate above 100%, have been carried out during the period between FY 2019/20 and FY 2020/21.

Ramy Youssef, Assistant Minister of Finance for Tax Policies and Development, confirmed that the coming period will witness the issuance of a simplified guideline that clarifies the correct path for tax payment for anyone who sells a commodity or service, works in advertisement, creates or promotes content via social media.

Walid Abdullah, Head of the Central Department of Treasury Budget at the Ministry of Finance, and Director of the Government Financial Information Management System (GFMIS) project at the Ministry of Finance, said that we aim to apply the GFMIS system to economic bodies on an experimental basis during the period from March 2022 until the end of next June, in preparation for its implementation in the year’s budget the next fiscal year to connect all government agencies electronically. This contributes to creating a strong public financial management system by integrating, controlling and computerizing all government financial operations, starting with budget preparation, implementation and control. This helps to achieve financial discipline, and to use state resources efficiently and effectively.

He added that the application of the GFMIS system in the budgetary entities with its accounting units, which amounted to about 2,637 units of account, and linking it to the electronic payment and collection system GPS, and the unified treasury account TSA, contributed to closing the final accounts of the budget ended on the same day at the end of the year, and for the budget to work from the first day of the new fiscal year, in a way that leads to achieving transparency and quality of performance, whereby the budget-financed entities are able to meet the requirements of their approved activities and plans in accordance with the specified financial allocations.

dailynewsegypt


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