IBM Consulting helping Egypt’s government with tax system overhaul

27 June 2022 3 min. read

Egypt’s government is working with IBM Consulting on a large digital overhaul of its national tax system.

As part of a major modernisation drive, the Egyptian central government is working on a long-term agenda to enhance the way the Ministry of Finance receives taxes from businesses and individuals, while expanding the tax base through further integration of the informal economy into the formal economy.

Illustrating just how important the overhaul is for the government – according to official statistics from Egypt’s Ministry of Finance, taxes represent more than 75% of the state’s general revenues.

Ministry of Finance, Egypt

Mohamed Maait, Egypt’s Minister of Finance, said: “The modernisation of the current taxation system is part of the Unified Tax Law and the national vision to maximise public revenues, and builds on the digital transformation strategy that the government has launched to enhance the business ecosystem in Egypt.”

Alongside adopting an improved blueprint for the tax system and processes, the Ministry of Finance is turning to technology to reap several benefits. For starters, a new platform will enable taxpayers to easily pay off their duties, while providing the Egyptian Tax authority better governance and control over tax collection.

Second, by digitising and automating many processes, the Tax authority will be more efficient and effective in the execution of routine tasks, and as a result, employees will have more time to work on more complex or value adding cases.

Meanwhile, enhanced transparency coupled with analytics will enable the authority to “list the tax community more accurately” and “expand the tax base” – which is expected to grow overall receipts.

On the technology-side of the overhaul, Maait said: “The Ministry is keen to adopt advanced technology in its reform agenda.”

The backbone and the consultants

Hosting the new operating model is a solution based on the SAP Tax and Revenue Management for Public Sector package. The solution equips the Tax authority with an operations platform that helps streamline and automate its business processes into intelligent workflows, enhance collaboration and elevate its ‘citizen experiences’.

IBM Consulting helping Egypt’s government with tax system overhaul

Also part of the technology backbone is IBM Cloud Pak for Business Automation. This solution provides taxpayers, tax officers and collectors with a smoother, more automated, and well-governed taxation journey. The AI-based solution helps taxpayers enhance the accuracy of their submissions, and at the other side of the table, helps collectors better assess cases and battle tax evasion.

Commenting on the project, Tamer Fahmy, Managing Partner of IBM Consulting in Egypt, said: “We are proud that the solution from IBM and SAP is providing the taxpayer community in Egypt with a robust and well governed platform through which all companies and taxpayers can pay off their duties and the Egyptian Tax authority can better govern and control tax collection.”

Asked why the government selected the consulting firm for the high-profile project (the engagement is one of the most impactful digital transformations projects in the country as it indirectly impacts tens of millions of individuals and businesses), Fahmy pointed at the firm’s “proven record in the local market, deep SAP consulting expertise and commitment to client success.”

From pilot to full roll-out

Following months of preparation, the new blueprint and system was successfully piloted with ten tax offices in Greater Cairo. Green light has now been received for full roll-out across Egypt, with IBM Consulting continuing in its role as lead implementation consultant and systems integrator.

Marwa Abbas, General Manager of IBM in Egypt, stated: “We are honoured to be leading such a complex project that supports the national economy. We look forward to the roll-out and are confident that the integrated core taxation model can support Egypt’s digital transformation journey.”