Egypt’s Minister of Finance Mohamed Maait has stated that his ministry is keen on stabilising tax policies in the structural reform package, to create a business climate, and attract more investors.
The policies aim to: control the country’s budget deficit rates and public debt of the gross domestic product (GDP); maintain sustainable economic growth rate; raise the efficiency of public revenue collection; and ensure its proper management.
This would eventually contribute to creating a business climate, attract more investors, and expand the developmental partnerships of the private sector.
The policies will strengthen the structure of the national economy, whilst improving the standard of living of citizens and upgrading the services provided to them.
In a statement on Saturday, Maait added that projects to modernise and digitise Egypt’s tax management system contribute to stimulating investment and facilitating procedures for financiers and raising the efficiency of tax collection.
Tax revenues are expected to increase by 15% during the last fiscal year, without burdening citizens with any additional burdens.
The minister pointed out that the tax legislative umbrella has been developed in line with the process of modernising and mechanising the tax administration system. This is aimed at integrating the informal economy into the formal economy, and to lay the foundations for tax justice.
He said that the amendments made to the value-added tax (VAT) law aim to legalise the situation after the application of the electronic declaration system. They also aim to: enhance the financial inclusion of electronic payments (e-payments); deepen communication between the Egyptian Tax Authority and registrants electronically; and facilitate tax refunds on purchases of foreign visitors.
This can boost tourism and allow the temporary release for three months of incoming messages for production operations or activity so that they do not incur fines. This is in addition to exempting goods and services received for economic zone projects, in order to stimulate investment.
Maait said that the unified tax procedures law is an unprecedented legislative shift. It aims to integrate, simplify and automate the procedures for linking and collecting income tax, VAT, state financial resources development fee, stamp tax, and any similar tax.
Electronic means are approved in the form of: tax proofs; communication with financiers and taxpayers; established books and records; tax assessment and collection procedures; ways to appeal against tax assessment forms; and the application of the electronic signature system.
Maait also said that the new micro, small and medium enterprises (MSMEs) law includes many incentives to integrate the informal sector with the formal economy.
The minister noted that the temporary licence issued for each of these projects replaces any approvals or other legal procedures. The tax due during the validity period of the temporary licence was set at EGP 1,000 annually for micro-informal economy projects whose annual turnover is less than EGP 250,000.
It stands at EGP 2,500 annually for projects whose annual turnover ranges from EGP 250,000 to EGP 500,000, and EGP 5,000 annually for projects whose annual turnover ranges from EGP 500,000 to EGP 1m, without the need to keep books.
