The Egyptian Tax Authority (ETA) has introduced a comprehensive guide to help investors navigate their rights and tax obligations, reinforcing the country’s commitment to enhancing its business environment. The initiative, supported by the expansion of the Investor Support Unit and the Advance Ruling Unit, aims to provide more effective assistance to both new and existing taxpayers.
Rasha Abdel Aal, Head of the Egyptian Tax Authority, highlighted the ministry’s continuous efforts to strengthen communication between tax professionals, economic associations, and the business community. She emphasized that these partnerships are critical in developing Egypt’s tax framework and ensuring fairness in its implementation.
In her statement, Abdel Aal noted that the guide would serve as a crucial resource for investors, offering clarity on their responsibilities and rights while reassuring them about the stability of their tax obligations moving forward. This initiative is aligned with the Ministry of Finance’s broader strategy to engage in open dialogue with stakeholders, identify challenges, and provide practical solutions to improve the investment climate.
The expansion of the Investor Support Unit and Advance Ruling Unit is expected to further streamline the process of addressing taxpayer concerns, making it easier for individuals and businesses to comply with regulations. The measures also reflect the Egyptian government’s ongoing efforts to modernize its tax administration, promote voluntary compliance, and reduce disputes.
This development coincides with Parliament’s recent approval of a comprehensive package of tax relief measures, ushering in an era of greater transparency and fairness. According to Abdel Aal, the package marks a significant step toward enhancing trust between the government and the business sector.
The tax relief package consists of 20 provisions, with some requiring legislative amendments and others needing ministerial or administrative decisions. Among the key provisions is a simplified and incentivized tax system for small businesses, micro-enterprises, professionals, and entrepreneurs whose annual revenues do not exceed EGP 20 million. The new system includes exemptions from prior tax liabilities, stamp duties, development fees, and registration charges. Income tax for qualifying businesses will be capped at a maximum of 1.5%, with a tax audit taking place only five years after enrollment.
Additionally, businesses enrolled in this system will be exempt from advance payments, profit distribution tax, and capital gains tax. Participants will also benefit from simplified reporting obligations, including annual income tax returns, quarterly VAT filings, and annual payroll tax returns.
A notable provision of the tax relief package is the capping of tax penalties, ensuring that they do not exceed 100% of the original tax due. This measure seeks to alleviate the burden on taxpayers, preventing excessive fines and late fees that arise from delayed tax audits or prolonged disputes. Furthermore, Law No. 160 of 2024 extends the validity of Law No. 79 of 2016, facilitating the efficient resolution of outstanding tax disputes.
In this regard, Abdel Aal explained that a new mechanism has been introduced to resolve pre-2020 tax disputes, particularly for cases assessed on an estimated basis. Taxpayers can now settle by paying a percentage of their declared tax liability or their last assessed tax amount without undergoing a full audit. Those with proper financial records who have already been audited for pre-2020 periods may request a settlement, provided they settle the original tax within three months, avoiding late fees and additional taxes.
The package also allows taxpayers who missed their filing deadlines between 2020 and 2024 to submit their returns within a specified period, without facing legal penalties. Amended returns can also be filed for these years to correct any omissions or errors, without penalty.
Abdel Aal, further, noted that the scope of sample-based tax audits has been expanded to include all taxpayers across tax centers, zones, and offices, beginning with the 2023 tax returns. To facilitate the audit process, the ETA will announce the required documents on its website in advance, requesting only minimal additional documentation when necessary.
On the other hand, El-Sayed Saqr, Deputy Head of the Egyptian Tax Authority, underscored the importance of effective monitoring mechanisms to ensure the successful implementation of the relief measures. He announced the creation of a high-level committee tasked with overseeing the application of the tax relief package, which will be supported by a 24/7 operations room to address any execution challenges swiftly.
Rabah Rateb, Chairperson of the Scientific Association for Tax Legislation, praised the tax relief measures for their potential to positively impact Egypt’s economy. He commended the Ministry of Finance and the Tax Authority for their flexible approach in addressing the needs of the tax community, adding that Egypt’s tax administration has become a model for other nations in the Arab region.
Erfan Fawzy, Secretary-General of the Scientific Association for Tax Legislation, reaffirmed the association’s commitment to continued collaboration with the Tax Authority to promote tax awareness and ensure a fair and efficient system. He emphasized the importance of understanding taxpayer challenges and working together to develop effective solutions.
Mohamed Younis, President of the Egyptian Society for Political Economy, highlighted that the newly introduced tax relief measures would attract more investment, stimulate economic growth, and support Egypt’s long-term economic objectives.
The launch of this guide and the accompanying tax relief measures mark a significant milestone in Egypt’s efforts to modernize its tax system and improve its investment climate, further cementing the nation’s position as a key player in the global economy.
