News

World Bank Doing Business survey: Egypt down five places – but is this the full story?

December 2015


Published annually, the World Bank Doing Business project provides objective measures of business regulations for local firms in 189 economies worldwide.

The new report, Doing Business 2016: Measuring Regulatory Quality and Efficiency, shows Egypt ranked in 131st place in terms of the world’s best environments for ease of doing business (a drop of five places on last year), and ranked in 151st place in terms of tax regulation – down from 146 last year.

While the country’s total tax take, at 45 per cent, is somewhat in excess of the MENA regional average of 32.6 per cent, it is competitive against the OECD average of 41.2 per cent. Egypt’s profits tax rate too, at 16.3 per cent, is competitive against the 14.9 per cent average for OECD countries.

The country’s poor performance on tax can perhaps be traced to the excessive compliance burden to which businesses are subject. While entrepreneurs throughout the Middle East are spending an average 216.1 hours per year on their tax compliance, in Egypt this figure is 392 – a situation that may be directly attributable to the absence of online filing opportunities. This year’s World Bank report highlights the importance of electronic filing, citing more than 85 per cent of jurisdictions in Europe now allowing online submissions – in contrast to less than 30 per cent in the Middle East and North Africa.

Karim Dabbous, managing partner in Russell Bedford's Cairo firm, commented: “While the total tax burden in Egypt is somewhat higher than in other Middle East states, this is not seriously adrift of rates in developed economies. But an absence of online filing facilities is placing an excessive – and unnecessary – burden on entrepreneurs. A situation that has to be rectified if the country is ever to compete with other emerging economies."