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December of 1992, Amoco provided the Egyptian officials with
accounting advice on the financial arrangements and numerous
drafts of agreements and letters between the Ministers of
Petroleum and Finance. Amoco attempted to remain apart from the
decision-making aspects of the resolution of the issue, but was
nevertheless involved in the process.
On August 1, 1992, the Minister of Finance responded to
Banbi's May 21, 1992, letter, confirming that EGPC should have
deducted foreign partner taxes from income and not from its
taxes. The Minister further stated that a retroactive accounting
settlement between taxes and surplus would not be feasible and
that instead the Finance Ministry would use EGPC's future surplus
to pay the tax differentials for the previous years up to
June 30, 1992, successively.
By letter dated August 6, 1992, Banbi agreed to the
principles in the August 1, 1992, letter from the Minister of
Finance and asked that instructions be given regarding the
immediate implementation of those principles. On August 11,
1992, the Minister of Finance forwarded Banbi's letter to the
head of the Funding Sector of the Finance Ministry, and to the
chairman of the ETD. The necessary steps were subsequently taken
to implement the agreement of the Ministers of Finance and
Petroleum as to disallowing EGPC's tax credit claims for
royalties and foreign partner taxes for all open years, beginning
with EGPC's tax year ended June 30, 1981.
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