Talking to local media, an unnamed ministry official revealed that the Ministry of Finance is looking to attract investors with a slew of new tax incentives through a new 5-year tax policy
Talking to local media, an unnamed ministry official revealed that the Ministry of Finance is looking to attract investors with a slew of new tax incentives through a new 5-year tax policy.
According to the source, the first draft of the new policy has been completed and is expected to be finalized and ready for public viewing as early as November. They added that the tax reform plan is currently in legal review and will be made available to the local community for feedback, but did not share a potential date.
The source disclosed that the new policy is intended to promote investment and investor confidence.
A set 5% wage tax and 10% tax rates on commercial profits could be implemented in certain economic zones, which would replace the current 22.5% corporate income tax rate, explained the media outlet.
Tax deductions on new projects of between 30-50% can be claimed by some investors depending on the scale and size of their investment.
The finance ministry has been planning and implementing several financial and tax reforms over the past few months as it works to integrate the informal and formal economies, combat tax evasion, modernize the tax system, and bolster tax revenues.
In a statement earlier this week, Minister of Finance Mohamed Maait revealed that Egypt’s tax revenues grew by 27.5% due to the ministry’s efforts.
Maait also highlighted the legislative amendments were executed to remove tax and customs exemptions on economic and investment activities for state-owned entities and companies, promoting fair competition within the local market as Egypt works to further empower the private sector.
The IMF’s director of the Middle East and Central Asia, Jihad Azour, explained in an interview released last week that “Tax reforms constitute an essential factor in achieving tax justice, on the one hand, and the diversification of sources of revenue, on the other. I think Egypt has untapped space to increase budget revenues by abolishing tax exemptions, which can help to achieve social justice”.
