Egypt has launched the first phase of its new tax facilities measures. Prime Minister, Mostafa Madbouly, and the Minister of Finance, Ahmed Kouchouk, announced the initiative during a press conference on Wednesday. Minister Kouchouk emphasized that this step is crucial for strengthening the relationship between investors and the tax authority. “We have carefully studied the challenges faced by businesses and have taken decisive action to address their needs,” he stated.
Simplified Tax System
Small and micro enterprises with annual business volumes below EGP 15 million will benefit from a streamlined tax system. The government will provide incentives to encourage informal businesses to transition into the formal economy. Further, Financiers can submit or modify tax reports for 2021-2023 without penalties.
The tax reporting process will be simplified, and a sampling inspection system will be expanded. Further, tax inspections will be conducted based on a risk management system, ensuring fairness and efficiency. Besides, the government will cap penalties for tax violations to prevent excessive burdens on businesses. The government will accelerate the process of resolving tax disputes and accumulated tax files to stimulate economic activity.
Transfer Pricing Exemption
The exemption threshold for transfer pricing studies for international companies will increase to EGP 30 million. A new central settlement mechanism will be introduced for investors. Further, the government will streamline the VAT refund system to facilitate the process for businesses.
Minister Kouchouk also highlighted the government’s commitment to improving the VAT refund system. He announced that the ministry has already refunded EGP 3 million to financiers and aims to increase this amount significantly in the future.
These new tax incentives are expected to create a more favorable business environment in Egypt, attracting both domestic and foreign investors. By reducing administrative burdens and providing clear and predictable tax rules, the government aims to boost economic growth and job creation.
