A proposed framework for activating green taxes and their role in promoting sustainability considering the dimensions of digital transformation: to develop the Egyptian tax system.

Author

Walid Hamed Saeed Mohamed Ghoneim
Mahmoud Ismail Mahfouz Ismail
Amira Ali El-Shabrawy Ahmed

Abstract

This research aims to present a proposed framework for implementing green taxes as an effective tool to support sustainable development, considering the transformations taking place in the tax system considering the digital transformation. The importance of the study stems from the need for financial and legislative mechanisms that address environmental and economic challenges and promote a balance between growth and environmental development, considering Egypt’s Vision 2030. The researchers relied on a descriptive and analytical approach, analyzing theoretical literature and international and local practical applications related to environmental taxes and their role in promoting sustainable development. A gap analysis method was also used to identify shortcomings in current practices, in addition to relying on secondary data obtained from: (1) Reports from international organizations such as the World Bank and the Organization for Economic Co-operation and Development (OECD). (2) Reports from the Ministry of Finance and the Ministry of Environment. (3) International experiences in the field of green taxes and digital transformation published in scientific journals. (4) Previous studies on the study variables (digital transformation, green taxes, sustainable development). The researchers were able to present a proposed framework consisting of five main pillars: The implementation objectives of the proposed framework, The accounting framework for green taxes., The dimensions necessary to measure the impact of green taxes on sustainable development, A digital action plan for implementing green taxes, Indicators for measuring the effectiveness of green tax implementation.

The study concluded that the successful implementation of green taxes requires the integration of digital policies with the accounting, regulatory, and social design of the tax. Furthermore, the integration of digital technologies into green tax administration improves efficiency and contributes to supporting sustainable development goals by enhancing tax compliance, reducing emissions, and providing accurate database for decision-making. Furthermore, directing tax revenues towards green projects and environmental incentives enhances their societal acceptance and environmental, economic, and social effectiveness in achieving sustainability. The researchers recommend that policymakers in Egypt adopt this proposed framework by issuing national legislation regulating environmental taxes, developing environmental tax information systems powered by artificial intelligence and big data analytics, and linking green taxes to environmental and social performance indicators, thus achieving a qualitative shift towards a green and sustainable economy.

Keywords: Digital transformation, green taxes, sustainable development.

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