Books not to miss this book fair – Bringing taxes and democracy together

Dina Ezzat , Sunday 26 Jan 2020

With the inauguration of the Cairo ‎International Book Fair (22 January-4 ‎February), Ahram Online offers a series of ‎recommendations for avid readers

book cover

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.‎ 

Short link: