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The Egyptian tax system reforms, investment and tax evasion (2004-2008)


  • Somaya Ahmed Aly Abdel-Mowla


Purpose - This study aims to evaluate effects of tax system reforms on tax obstacles to investment in Egypt and tax evasion. It also aims to analyze differences in burden of tax obstacles and extent of tax evasion among different types of enterprises after applying tax reforms. Design/methodology/approach - The study uses data from Productivity and Investment Climate Surveys 2004 and 2008. A number of indices are constructed to measure incidence and severity of tax obstacles. Two indicators are constructed to estimate incidence and extent of tax evasion. The study adopts a descriptive analytical comparative approach to evaluate changes and differences in severity of tax obstacles, and their effects. Findings - The results obtained show that tax reforms have resulted in a significant decrease in severity of tax obstacles. However, they are still major obstacles. The overall decrease hides differences in the burden of these obstacles. Reforms were not enough to address needs of small enterprises. The extent of tax evasion decreased. However, it is still a problem as tax obstacles are still major obstacles. Research limitations/implications - There is a need for more detailed data about problems enterprises face in each phase of interaction with tax administrators and managers’ suggested solutions. Originality/value - The study evaluates the actual effects of a major economic reform, on the microeconomic level during an important period rather than exploring enterprises’ expectations. The results show that there is a need for more reforms targeting small enterprises.

Suggested Citation

  • Somaya Ahmed Aly Abdel-Mowla, 2012. "The Egyptian tax system reforms, investment and tax evasion (2004-2008)," Journal of Economic and Administrative Sciences, Emerald Group Publishing, vol. 28(1), pages 53-78, January.
  • Handle: RePEc:eme:jeaspp:v:28:y:2012:i:1:p:53-78

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    References listed on IDEAS

    1. Haidar, Jamal Ibrahim, 2012. "The impact of business regulatory reforms on economic growth," Journal of the Japanese and International Economies, Elsevier, vol. 26(3), pages 285-307.
    2. Szarowska, Irena, 2009. "Tax burden and competition in the European Union – Does it change?," MPRA Paper 19934, University Library of Munich, Germany.
    3. Simeon Djankov & Tim Ganser & Caralee McLiesh & Rita Ramalho & Andrei Shleifer, 2010. "The Effect of Corporate Taxes on Investment and Entrepreneurship," American Economic Journal: Macroeconomics, American Economic Association, vol. 2(3), pages 31-64, July.
    4. Alexander D Klemm & Dennis P Botman & Reza Baqir, 2008. "Investment Incentives and Effective Tax Rates in the Philippines; A Comparison With Neighboring Countries," IMF Working Papers 08/207, International Monetary Fund.
    5. repec:taf:rjapxx:v:15:y:2010:i:2:p:166-191 is not listed on IDEAS
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