Electronic Returns Role in Tax Compliance
The tax declaration is an official form that shall be prepared entirely electronically to be then submitted within a statuary time along with the required information and supporting documents by the taxpayer to Tax Authority for each tax period according to the provisions stated in the Income Tax Law No. (17) of 2010 AD and its amendments, as well as the General Sales Tax Law No. (19) of 2001 AD and its amendments.
Therefore, the taxpayer is a sole liable of declaring and submitting taxes declarations related to:
- Direct tax, i.e. those taxes of which is borne by the taxpayer himself, or he is legally a liable to withhold them from other parties, since it is required to remit the due tax as income taxes, e.g. (Commercial and Industrial profits / profits on non-commercial and non-industrial professions / salaries and wages / real estate rents).
- Indirect taxes, General Sales Tax (GST), since it falls on the taxpayer / The legally Registered Person, being he is a sole liable before Tax Authority for adding the applicable rate of this GST to total price of his sales /services invoices.
Accordingly, and in order to fulfill his obligations before the public treasury, the Taxpayer is fully liable for filling out the official forms of returns electronically and within a statutory time, as follows:
Monthly returns
In order to fully comply with the applicable regulations, the taxpayer must submit tax declarations for the salaries and wages tax on a monthly basis. These declarations should be submitted within the first ten days of each month for the previous month. As a result, the taxpayer will need to submit a total of 12 declarations throughout the year for the salaries and wages tax.
Annual returns
Every taxpayer must submit an annual income tax return (commercial and industrial profits tax / non-commercial and non-industrial profits tax / real estate revenue tax) no later than April 30 of each year for the previous year.
Based on the above, the total number of declarations that the taxpayer/registrant must submit to the tax administration during the year, other than occasional declarations, amounted to about 25 declarations. The matter required the taxpayer/registrant to visit the tax administration to submit his tax returns 25 times a year at a minimum, and these multiple visits during the year leads to an increase in the cost of tax compliance, especially since he must submit these returns on the legal dates to avoid calculating fines for delaying the submission of returns stipulated in tax laws and set at 2% for each month of delay or part thereof.
This is due to the distances and locations of activities and the severe crowding that the tax administration suffers from in the last days of the legal periods specified for submitting monthly and annual returns, and the accompanying delay in receiving the returns and friction with some tax administration employees upon receipt, in addition to the inability to submit some returns on the legal dates due to the busyness of some. The taxpayers are not present at their workplaces, happen to be outside the country during the legal deadlines for filing returns, and other problems.
All of this has prompted the tax administration to develop methods for providing tax services, within the framework of its tireless efforts towards digital transformation and to serve its trends towards changing its role from an administration concerned with collection to an administration that provides services to the public of taxpayers at the lowest cost and in the fastest time, considering that tax returns are the responsibility of the taxpayer and are the tool through which The taxpayer performs his legal duties and addresses the tax administration through it. It was necessary for the tax administration to work hard to facilitate the procedures for submitting these returns by adopting electronic submission in a way that achieves the following objectives:
- Remaining updated on the latest systems, technologies, and international best practices.
- Providing taxpayers with the flexibility to file their returns 24/7, even on official holidays.
- Taxpayers can submit their declarations from anywhere, even if they are not in the country or in their hometown, making it easier to meet tax obligations.
- Reducing the cost of tax compliance and reducing time and effort.
- Decreasing possibilities of disputes with tax office staff and addressing corruption issues.
- Ease of managing the electronic tax record.
Electronic submission of tax returns simplifies the task for the public, enabling them to meet their legal responsibilities swiftly and at minimal expense. This method ensures timely compliance and eliminates the risk of incurring fines due to delayed submission.