The Egyptian Tax Authority (ETA) Head, Rasha Abdel Aal, announced that the second package of tax facilitation measures includes a set of major legislative amendments designed to support economic activity, ease the tax burden, and simplify Egypt’s tax system.
The measures come in line with directives from Minister of Finance Ahmed Kouchouk to expand tax incentives and provide stronger support for key productive and service sectors, particularly healthcare, manufacturing, and trade.
Reduced VAT on Medical Devices to Support Healthcare
Abdel Aal said the new package introduces amendments to the Value Added Tax (VAT) Law, most notably:
- Reducing VAT on medical devices to 5%, down from the standard 14%
- Fully exempting inputs, components, and supplies used in kidney dialysis machines and kidney filters from VAT
“These amendments are aimed at supporting the healthcare sector, reducing costs for citizens, and encouraging local manufacturing of medical equipment,” Abdel Aal explained.
Extended VAT Suspension on Machinery and Equipment
To further support industrial production, the package allows for an extension of the VAT suspension period on machinery, equipment, and medical devices used in manufacturing.
Under the new amendments:
- The suspension period can reach up to four years
- Extensions are granted based on valid justifications approved by the Egyptian Tax Authority
This step is expected to ease cash flow pressures on manufacturers and encourage new investments in productive sectors.
VAT Exemption for Transit Trade Services
The package also includes a VAT exemption for services provided to goods in transit, provided that:
- Transportation is conducted under the supervision of the Customs Authority
- All procedures comply with the Customs Law
According to Abdel Aal, this measure aims to stimulate transit trade through Egypt, enhance the country’s logistics competitiveness, and reinforce its position as a regional trade hub.
VAT Adjustment on Soap and Industrial Detergents
In another amendment, soap and industrial detergents for household use will now be subject to the standard VAT rate of 14%.
While this represents a rate increase for finished products, Abdel Aal clarified that the change:
- Allows taxpayers to fully deduct VAT on production inputs
- Aligns with international best practices
- Supports the principles of tax neutrality and fairness
“This approach ensures a more balanced tax treatment across production chains and enhances transparency within the VAT system,” she said.
Supporting Growth Through Tax Reform
Abdel Aal emphasized that the second package of tax facilitation measures reflects the government’s broader strategy to:
- Simplify tax procedures
- Support economic growth and investment
- Balance revenue collection with social and economic priorities
The amendments will have a positive impact on healthcare affordability, industrial competitiveness, and trade activity, while reinforcing confidence between taxpayers and the tax authority.
