AlDraeib Maslahat Man? Qira’h fi aliqtissad alsayyasi lldaraeib bimisr (Who is really benefiting from taxes? A read in the political economy of taxes in Egypt) — El-Maraya, Cairo, 2019
A book on taxes is rarely an immediate draw for the average reader. Many share an aversion to economy titles, even if a book with a grey cover that has cuttings from leading Cairo dailies from the past half-century is somewhat eye-catching.
However, what proves very interesting is a book on why an acute deficit of democracy makes it hard for the state to win the confidence of the people and make it possible to promptly collect taxes adequate to the equitable promotion of social justice.
This is essentially the story of a book that El-Maraya — one of the very few publishers with an interest in political economy titles — issued as 2019 was coming to an end, and in anticipation of the 2020 Cairo International Book Fair.
AlDraeib Maslahat Man? Qira’h fi aliqtissad alsayyasi lldaraeib bimisr (Who is really benefiting from taxes? A read in the political economy of taxes in Egypt) is a series of seven articles by seven economy researchers. In 200 pages, which are not short on graphs or newspaper clippings, the authors offer a concise history of wealth and income taxes in Egypt, and how taxes have been used — at times manipulated — to promote the political choices of a regime.
Wealth tax, the authors argue, was often used to win the support of either the poor or the rich since the introduction of the system in the 19th century. And the same "political manipulation" continued with the introduction of income tax in the late 1930s, the authors add.
As the book compares official political discourse on taxes with the text of relevant laws, the authors amplify an often fascinating contrast.
Talk about “making socialism real through the tax system,” which reigned high in the 1960s, the book argues, was not really applied on the ground because the state failed to enforce an efficient tax system that would bring adequate inputs from the rich to be used to serve the wider interest and needs of society.
This said, the regime that had already stripped people of political liberties had to compensate by providing subsidised social services. And when an efficient tax system failed to materialise, there was the obvious alternative of nationalisation.
The 1970s and 1980s, the book notes, offered a similar formula: limited democratic advances and a largely crippled tax system.
In the 1990s, the book recalls, under the wing of the International Monetary Fund, the commitment to introduce an efficient tax system remained unfulfilled as the regime worried that its ability to combine both a reduction in subsidies with higher income tax would unsettle the poor who had already put up with IMF-required austerity measures, despite a political discourse that suggested otherwise. At that time, the regime was not even contemplating the idea of challenging the rich, whose support it needed on the political front to compensate for the democracy deficit. Not much has changed since then, the book argues.
Still, the book reminds that it is not just the poor whose discontent the state has to worry about when making tax decisions, and it is also not just the rich that present a possible political impact. It is also, the book argues, foreign investors whose wish for very limited taxes has to be accommodated under the banner of "being an investment friendly market." The story of oil companies working in Egypt falls eloquently under this rubric.
The book makes a point of looking into the “human" aspect of the taxes story. It looks at the role of tax collectors; often enough overworked and underpaid civil servants.
The need to create an efficient tax system that would help secure adequate input to state coffers, the authors suggest, has to start by securing the confidence of taxpayers that the money they pay is used to fund public services, create more job opportunities, and encourage economic growth, while taking into account the working conditions involved.