This program proceeds on two fronts. First, it seeks to address the basic rationale of taxation and how it relates to representation so as to redefine the relationship between the Individual and the State, an issue which remains unresolved and confused by a muddled political debate. This will help overcome public obsession with the effects of corruption, and also address the advantages of representative democracy. Second, it seeks to introduce a simple Flat Income Taxsystem to replace all existing tax legislation.

Most Egyptians have a distorted view of the relationship between the state and its citizens when it comes to economic matters. Influenced by the experience of millions of Egyptian working in the Persian Gulf for over 50 years, average citizens really only have the Rentier Economy as a frame of reference for understanding economics, which in this case dictates that the bulk of national income is composed of revenues generated from natural resources acquired and distributed by the government. Therefore, the common explanation for any economic problem, say low standards of living or unemployment, is that the fortunes of Egypt are being "stolen" by a coalition of big businesses and incumbent politicians. The sheer fact that taxes account for more than 60% of public revenues (in the 07/08 balance sheet) is a shock to most Egyptians.

On the other hand, though the government has pursued rigorous reform of the tax system, major problems remain. Whereas law 91/2005 on Income Tax lowered the maximum tax rate from 42% to 20% thus stimulating investment and tripling tax revenues in 5 years, the income tax system retains a progressive structure with a complex scheme of deductions and exemptions. Furthermore, while law 196/186 on Real Estate Taxes is an improvement on the previous version of the law, we believe that all taxation should be based solely on income and that all other taxes should be repealed. The same argument applies to sales taxes, currently dictated by law 11/1991, especially considering that the government is now drafting a new law that will adopt the extremely complex VAT (Value-Added Tax) system.

Therefore, our program on taxation proceeds on two fronts. First, it seeks to address the basic rationale of taxation and how it relates to representation so as to redefine the relationship between the Individual and the State, an issue which remains unresolved and confused by a muddled political debate. This will help overcome public obsession with the effects of corruption, and also address the advantages of representative democracy. Second, it seeks to introduce a simple Flat Income Tax system to replace all existing tax legislation.