He also added that informal economy projects with temporary licenses will have no tax accounting
New tax incentives included in the Law on the Development of Micro, Small and Medium Enterprises (MSMEs) are to encourage their joining of the formal economy, says Minister of Finance Mohamed Maait.
Part of the national campaign on tax awareness, this will contribute to the development of productive capabilities, providing job opportunities, and advancing the national economy.
The minister notes that the new law allows the legalization of MSMEs operating in the informal economy that operate without a license.
He also added that informal economy projects with temporary licenses will have no tax accounting, this is to adjust their legal situation for the years prior to the date of submitting the request.
These temporary licenses supersedes any other legal approvals or procedures.
Maait noted that the new law specifies that taxes are due on informal economy projects that do not exceed the volume of their business, or their sales according to the declaration submitted by the taxpayer.
This covers the validity period of the temporary license, equivalent to 1 percent of the project’s turnover, subject to these projects’ business value ranging between EGP 3 million and EGP 10 million annually.
Additionally, the law specifies a 0.75 percent tax rate on the turnover for projects whose size ranges between EGP 2 million and EGP 3 million annually. A tax rate of 0.5 percent will be applied on projects who have a business volume turnover of between EGP 1 million and EGP 2 million annually, Maait added.
The minister further pointed out that the new law specified the tax due at EGP 1,000 annually for small informal projects who have an annual business volume of less than EGP 250,000, during the period of validity of the temporary license.
This is in addition to imposing tax dues estimated at EGP 2,500 annually for projects with an annual business volume ranging between EGP 250,000 and EGP 500,000. The law specifies that EGP 5,000 in annual tax due will be submitted by projects with an annual turnover range of between EGP 500,000 to EGP 1 million.
