Egypt is thought to be the first country allover the world to have a central government or a state .        Evidently, it has known all kinds of taxation, including indirect taxation, since the very beginning of history . In modern times Egypt knew commodity taxation as early as the 19^th century.There were commodity taxes which bore the names; Tax on Land Products, Excises or " Production Taxes " and Consumption Taxes" There were commodity taxes which bore the names; Tax on Land Products, Excises or " Production Taxes " and "Consumption Taxes"

To cope with the international developments, Egypt adopted sales taxation so as to :

• Get rid of the disadvantages of the enlarged excise system which was applied in the 1980s
• Collect revenues enough to fund the development plans with the least negative effects on prices and with the minimum possible administrative burden

The (then) Consumption Tax Dept. was entrusted to prepare for the move from Consumption Tax, i.e, enlarged excise system to the General Sales Tax .

The Dept. started with conducting a set of studies based experience of other countries with various sales tax system. The Dept. concluded that :

• It is better to start with a uni  stage simple manufacturers sales tax,

• It is necessary to borrow the credit principle from VAT and to apply its mechanism from the very beginning of applying sales taxes so as to avoid tax accumulation.

• It is recommended to put in mind that the final end is to reach a Value   Added Tax and the move towards VAT should be approached on gradual basis,i.e, on stages or phases .

• Tax reform has to be accompanied by administrative reform. This include   modernization computerization of tax administration as well as getting   rid of old consumption   tax concepts and planting new ones suitable for sound the new sales taxes.

• Above cannot be reached except through ambitions training courses on various aspects necessary for tax and administrative reform.

• Studious efforts should be focused on educating the taxable community    and the public aiming at simply explaining the philosophy of the new tax   as well as improving the image of the sales   tax officer and building  mutual understanding and confidence between the Department. and the public.

• Essential amendments should be carried out in the Dept. structure so as to  fit the new tasks expected under the new tax .New administrative units should be   created e.g.    a translation unit, an economic analysis unit and a unit for comparative studies … etc. in order to contribute to the successful application of the new tax.

• New staff should be assigned to meet the anticipated large numbers of the   new registrants.

• Renovation of the Dept. infra  structure with the aim of creating a better work environment .Also, geographical expansion of tax offices all over the country proved to be a must.

• All above should go in parallel lines with the tasks necessary for the consumption tax collection.

• Great care should be given to co   ordination amongst said committees in such a way that preserves the integration of work, the unity and clarity of goal(s) as well as the close follow- up and the immediate response to problems that committees may encounter.

• Developing clear lines of communication with the decision maker and the top management level in the ministry of Finance.

• Coordination should be carried out with other departments, e.g, Customs ( because a great proportion of the anticipated revenue comes from G.S.T on imports ) as well as exchanging opinions and viewpoints with the ministries concerned.

So, eight committees were formed :

• Committee of Legislation
• Committee of Registration 
• Committee of Organization 
• Committee of Training 
• Committee of Administrative and Financial Affairs
• Committee of Computerization
• Committee of Publicity
• The above 7 committees are headed by the principal Committee of planning , Co ordination and Follow up

All afore said Committees started work simultaneously:

• The Committee of Legislation formulated the draft law and the draft Regulations.

A sub- Committee arised thereof to draft forms and records.

• The Committee of Computerization brought the Computer sets,designed the programs necessary for the application of the new tax and shouldered the task of training staff thereof with close coordination with the Committee of Training. Also it took the task of , technological modernization of the Dept. ( e.g the supply of photocopying machines,microfilming sets, fax sets … etc.)
• The Committee of Registration worked on the identification of anticipated registrants and on designing measures of registration thereof.
• The Financial and Administrative Committee procured funds necessary for the work of all other committees as well as funds for the renovation of the Dept. infra-structure beside establishing new G.S.T. office buildings necessary for the geographical expansion of the Dept. Also it worked on the establishment of training Centers ( Since the Dept.had none! )
• The Committee of Organization worked on designing a new departmental structure, identification of job, ranks and staff necessary for the sound application of the new tax . It also put job descriptions … All that were accomplished according to an accurate previously approved schedule.

• The Training Committee exerted all efforts possible in training staff on all fields of future work e . g identification , registration , collection , audit , anti evasion activities , data processing..etc.

• The Committee of Publicity exerted great efforts in preparing for future educational visits to taxable persons as well as holding meetings with trade and industrial unions and chambers and with the concerned businessmen . Also it answered all the questions and inquiries of the taxable persons . (This latter job was performed round the clock).It also worked on preparing material for the press and other mass media aiming at raising awareness of the new tax.

All previous work was accomplished with the highest possible degree of co ordination, flexibility and close daily follow-up,with daily support and solving of problems as well as procuring continual funds necessary for achievement of committees recommendations.

It is with all those efforts, objectives always clear, with the support of all people of the Ministry of Finance and with the cooperation of businessmen and the public that we could succeed . Our success is admitted by everybody .. It is clearly visible in the sound application of the General Sales Tax.

We do not look at this success as the be-all and end-all of our work. Rather it is the first step in the thousand  mile journey.. the journey in which the General Sales Tax in Egypt shall play its anticipated role in the ambitious Egyptian economic reform and the release of its implicit energies.

Ashraf Elaraby