(DNE File Photo)
The Ministry of Finance will put into effect the amendments to the income tax law, including increasing the limit for personal exemption from EGP 4,000 to 7,000 annually, state-run news agency MENA reported on Tuesday.
According to the report, all families of the 6.2 million public sector employees will benefit, not to mention the millions of families in the private sector.
President of the Egyptian Tax Authority Mamdouh Amr said that these tax exemptions would lead to an annual loss in revenue from income taxes of EGP 4bn for the treasury.
The government relinquished these funds for the benefit of citizens, and it is expected that the largest part of this amount will go towards local consumption and increase demand. Thus, this will contribute to the recovery of different markets, lead to an increase in economic growth and create employment opportunities.
In his statement today, Amr added that the increase of the personal exemption limit is in conformity with the government policy that aims to stimulate the national economy and overcome the current crisis, and at the same time, adopts financial policies that protect social justice, which is clear through the redistribution of the tax burden. It reduces the burden for low-income individuals by widening the lowest tax brackets of the income tax structure while increasing the burden on high-income individuals.
He pointed out that the first EGP 12,000 earned by all workers within the bureaucracy is not subject to income taxes. Workers with a salary of up to EGP 5,000 would benefit from the first income bracket exemption. The second bracket, from EGP 5,000 to 30,000, is subject to a 10% income tax rate. The third bracket, from EGP 30,000 to 45,000 is subject to a 15% tax. The fourth bracket, EGP 45,000 to 250,000 is subject to a 20% tax. The fifth bracket, more than EGP 250,000 is subject to a 25% tax.
Minister of Finance Ahmed Galal stated that the government is determined to achieve social justice. He emphasised that the alleviation of the tax burden for individuals with the lowest income, the implementation of a higher minimum wage of EGP 1,200 by next January, improvement of education and health services and pumping of investments to provide employment opportunities all confirm the government’s commitment to the programme that it set initially.
He indicated that the government’s commitment to care for the poor would continue despite its simultaneous commitment to reduce the budget deficit to 10% of GDP.
Translated from AlBorsa Newspaper
