MoF Decision #838/1 dated 21 May 2018 on the application of article 32 of the Law #79 dated 19 April 2018 (Budget Law 2018) related to the partial amnesty of the amount of taxes objected

The Ministry of Finance (MoF) has issued the decision #838/1 dated 21 May 2018 on the application of article 32 of the Law  No 79 dated 19 April 2018 (Budget Law 2018) related to the amnesty of the amount of taxes objected.

 

According to the aforesaid article 32 of the Law No 79, an amnesty equal to 50% of the amount of taxes (to the exclusion of any late/false declaration and late payment penalties due) is applicable for Income Tax and Value Added Tax (VAT) assessments which were objected at the level of the Appeal Committee but were not yet concluded by the latter as of the publication date of this Law 79. To benefit from such Amnesty tax payers have to file a written request to the relevant tax department and to settle the amount due as per the Amnesty within 4 months from the publication date of the Budget Law No 79/2018. Obviously, in this article, to the contrary of other articles applicable to similar exemptions such as articles No 40 of the Budget Law 66 and No 23 of the Budget law No 79, the condition precedent aiming to ensure that no tax has been fully paid yet, does not exist in the original text. The result of this is that the taxpayer was likely to retrieve 50% of the paid tax. The MoF noticed this loophole that was left by an oversight and settled the ambiguity through the issuance of the Decision No 838/1 dated 21/05/2018 (here below) and published in the Official Gazette (No26). This Decision denies to taxpayers that have already settled and paid the full amount of the challenged taxes, the right to benefit from the provisions of article 32 above mentioned.

Needless to precise in this regard that such decision may be qualified and considered as an action ultra vires (عمل تنظيمي ضار يتجاوز حدّ السلطة) in accordance with articles 65 and 105 of the State Council’s regulations (Legislative-decree No 10434 dated 14/6/1975 and its amendments) and may be challenged as such.

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