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Banking sector stands firmly against violating its clients' accounts' secrecy CBE governors strongly respond to statements to head of ETA on legislative amendment that allow looking at accounts of financiers
The banking sector has dealt decisively with the Egyptian Tax Authority's attempt to penetrate the secrecy of its clients' accounts. Tarek Amer, governor of the Central Bank of Egypt (CBE), responded strongly to comments by Emad Samy, head of the Egyptian Tax Authority (ETA), on the progress of a proposal to amend the law to allow the finance minister to access bank accounts of companies and individuals in order to reduce tax evasion. Amer said that this proposal will not be accepted by the CBE. He added that the CBE would not agree to amend the bank laws in this regard, in contradiction to the secrecy of bank accounts. He called on the head of the tax authority to be more thoughtful and only talk within the limits of his power, as he put it. Amer stressed that the CBE will protect the confidentiality of customer accounts in banks, and to face any attempt to break through it strongly and decisively. On Sunday, the ETA Head said that they proposed an amendment to allow the finance minister to review bank accounts of companies and individuals to curb tax evasion. He explained that amendment to Article 99 of the Income Law does not contradict the CBE's Law. “The only goal is to stop tax evasion. We will not review all the accounts, but only those that provide unrealistic data to match them with bank account details,” he said. Samy added that under the amendment all parties will allow tax inspectors to review bank accounts after the approval of the Minister of Finance. He retracted the remarks on Sunday evening after he was faced with a severe storm of criticism from the leaders of the banking sector, headed by Amer. In an official statement he stressed the ETA's respect for the law of bank accounts' confidentiality being a guarantee for investors and a right for the CBE. Moreover, he added that there are procedures and legal mechanisms to enable the ETA to face tax evasion. Samy pointed out that his statements were misreported and contrary to the intention of the statement. He explained that this prejudice would harm the tax revenue and the stability of the banking sector, which is a major engine of the national economy. The ETA's statement confirmed that law number 91 for 2005 regulates the problem, as the data of taxpayers at the ETA are confidential and cannot be reviewed without the approval of the taxpayer or via a special text in the law. It also states that clients' banking accounts are confidential and can only be accessed based on the income law controls number 91 for 2005 and the banking laws number 88 for 2003. It did not stop at this point, as the Minister of Finance rushed to deny any changes or amendments to the tax law issued since 2005, explaining that the rumours about revealing the confidentiality of accounts of customers or companies dealing with banks are incorrect and that all data are protected by law and the constitution. Finance Minister Mohamed Moeit said that laws are effective, including the income tax law, which enables authorities to deal with tax evasion through law-stipulated mechanisms. He added that the statement of the ETA Head on the confidentiality of accounts was misunderstood, saying that in case laws are amended, it will be done in coordination with the CBE and after being publicised. According to Ruqaya Riad, legal adviser to the Federation of Egyptian Banks (FEB), they have set a list of cases, in which the confidentiality of the bank accounts can be unlocked, noting that tax related reasoning is not among these cases. The law of the CBE and the Banking Sector in article 97 states that “all accounts, deposits, trusts, and safes of the customers at banks, as well as their related dealings, shall be kept secret. Having access to or giving particulars about these accounts directly or indirectly shall be prohibited, except by written permission from the owner of the account, deposit, trust, or safe, any of his/her heirs, or any legatee of all or part of these funds, or from the legal representative or the proxy delegated in this regard or on the basis of a judicial ruling or an arbitration award. The prohibition stipulated in the previous clause shall apply to all persons and parties, including those empowered by law to have access to or obtain the papers or data, divulging the secrecy of which, is prohibited according to the provisions of this law. This prohibition shall continue to exist even if the relation between the customer and the bank is terminated for any reason." Riad told Daily News Egypt that the ETA will not be able to access bank accounts unless the law is amended. However, she ruled out the possibility of making this amendment, considering its negative impact on the banking sector and the whole economy, noting that she trusts in the awareness of the parliament that will stop against making amendments which violate privacy. She pointed out that the rules of maintaining the confidentiality of bank accounts are in force in all countries of the world, and the tax department of any country may not penetrate this confidentiality.
