Egypt’s government has approved a decision to increase the exempted tranche of the income tax to EGP 6,500 instead of EGP 5,000 as monthly income. The decision is applied to both public and private sector employees.
Economic expert and advisor to the Minister of Planning Abdel Fattah El-Gebaly said the move will increase the net income of employees, noting that it curbs inflation on the long-term.
The Ministry of Finance is planning to increase tax revenues for fiscal year (FY) 2015-2016 to EGP 422bn, compared with EGP 364.2bn in FY 2014-2015, a growth rate of 16.8%. The ministry said it will undertake a comprehensive development of the taxation system, to include raising the efficiency and performance of tax-collection entities.
“This guarantees the state’s rights, as well as the society’s, and prevents tax evasion,” the ministry said.
The expected amount of tax revenues to be collected during FY 2014/2015 had increased to EGP 364bn compared to EGP 358bn in the preceding fiscal year, representing a 1.6% increase.
In May, however, Minister of Finance Hany Kadry Dimian said that taxes collected during the first nine months of FY 2014/2015 registered EGP 180bn. This was an increase of 20% compared to the corresponding period the previous year.
The government is hoping to collect EGP 549bn in budget revenues in the FY 2014/2015, compared to EGP 569bn in revenues in the previous fiscal year. However, the estimate of the current fiscal year’s expenditures is EGP 789bn. The budget deficit is expected to register EGP 240bn, which is equivalent to 10% of GDP.