House approves tax incentives, facilitation laws, boosting business confidence: Abdel Aal
Rasha Abdel Aal, head of the Egyptian Tax Authority, has affirmed that the Minister of Finance is committed to implementing a new package of tax incentives and flexible procedures aimed at reducing burdens on taxpayers and fostering trust between businesses and the tax administration. She emphasized that modernizing the tax system is essential to stimulating investment and driving economic growth.
In a statement on Sunday, Abdel Aal highlighted the House of Representatives’ approval of new tax incentive and facilitation laws as a pivotal step toward strengthening confidence and partnership within the business community. She confirmed that the facilitation package would be implemented immediately following the issuance of the necessary laws and executive decisions.
The package includes waiving penalties for filing or amending tax returns from 2020 to 2024. Additionally, taxpayers can settle disputes related to estimated assessments for periods before 2020 by paying a percentage of the assessed tax. For book-based cases, settlements will require payment of the original tax plus 100% of delay fees, additional tax, and related amounts. Tax obligations can be paid in four installments over a year, with no delay fees applied to the original tax during the installment period.
Abdel Aal explained that the first phase of tax facilitation measures focuses on reducing taxpayer burdens by ensuring that delay fees and additional taxes do not exceed the original tax. The scope of sample-based tax inspections will also be expanded to include all taxpayers across tax centers, regions, and offices starting this season. “We are committed to resolving old disputes, integrating the informal economy into the formal system, and expanding the tax base by attracting new taxpayers while promoting voluntary compliance,” she stated.
A simplified and business-friendly tax framework has also been introduced for startups, small and medium-sized enterprises (SMEs), and professionals with annual revenues up to EGP 20 million. This system offers new incentives, exemptions, and facilitations across various tax categories, including income tax, value-added tax (VAT), stamp duty, and state resource development fees. Tax rates will range from 0.4% to 1.5%, and participants will be exempt from capital gains tax, dividend tax, stamp duty, and registration fees, among other charges. Additionally, VAT filings will shift from a monthly to a quarterly schedule.
The first tax audit for new participants will be conducted after five years. “This reflects our trust in small businesses and taxpayers’ declarations,” Abdel Aal said. She encouraged businesses in the informal sector to join the formal economy, assuring them that they would not face tax claims for previous years. “Registering in the system will serve as a fresh start—a birth certificate for their businesses,” she added.
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