Mohamed Maait, the Minister of Finance, announced that there is a presidential directive to prepare a new social protection package, which will include improving wages and pensions and reinstating tax exemptions to ease the burden on citizens. He expressed his commitment to launching a societal dialogue on the General State Budget for the fiscal year 2024/2025 to align with the strategic goals of the new republic.
He made these remarks during the annual conference of the Egyptian Tax Association, chaired by Ahmed Shoukry, and attended by Shihata Ghaturi, Head of the Customs Authority, Anwar Fawzy, Head of Real Estate Taxes Authority, Rasha Abdel Aal, Acting Head of the Egyptian Tax Authority, and Hisham Al-Rigal, Advisor to the President of Suez Canal Economic Zone.
The Minister of Finance stated that the government will present a structural reform for the General State Finance before the end of the current fiscal year. He said that the Tax Policy Strategy for Egypt 2024/2030 will be presented for public dialogue next month.
He added that the government is working on completing a comprehensive and integrated development to enhance both the tax and customs systems. This is in line with a steadfast commitment to establishing stable and investment-friendly tax and customs policies, supporting productive and export activities, and providing financial and investment incentives linked to real targets for strategically important and globally competitive sectors.
He mentioned that the government aims to establish systems that rely more on feasible tax and customs solutions, using some applications of artificial intelligence to optimize state revenue utilization. This approach enhances the path to formalize the real size of the Egyptian economy by integrating informal activities, attracting more private sector investment, and acting as a driving force for economic recovery and sustainable growth.
Maait stated that these electronic systems increased tax revenues by 26.9% during the last fiscal year without imposing additional burdens on investors. They contributed to a 43.6% increase in real estate transaction revenues and a 67% rise in gold sector revenues. Mechanizing the stock market’s unlisted shares also led to significant improvements in total payments in both Egyptian and foreign currencies. The minister emphasized that mechanized tax systems help expedite tax examination procedures, to complete them annually.
He highlighted that the government passed a new law reinforcing efforts to settle accumulated tax files, dealing specifically with entities and companies whose annual business turnover does not exceed EGP 10m. This new law uses a simplified fixed tax system, and its executive regulations have been issued.
The number of registrants in the electronic invoice system reached 500,000 with a high commitment rate, reflected in the nearly one billion electronic invoice documents issued so far. The total number of registrants in the e-commerce activity system, from various sources, reached about 40,000 cases since the start of the e-commerce unit at the Tax Authority in June 2021. A governance platform for electronic invoices named “SPGS” has been launched, linking it with the electronic invoice system to optimize state resources.
Maait also announced that the state treasury’s exemption from property tax for industrial, poultry, and other projects will be extended until the end of 2026 to support and encourage these sectors.
He said that the Tax Authority is close to completing a new income tax law project, which will be presented for public dialogue next month before reaching a consensus and taking the necessary steps to refer it to the Cabinet and then the House of Representatives. The government continues to exempt strategic industrial projects from certain types of taxes for five years.
The Ministry of Finance has also initiated a settlement system between investor receivables and any tax or other burdens for the benefit of government entities. It includes a 45-day time limit to expedite the refund of value-added tax. There is also an investment incentive ranging from 33% to 55% of the tax due on profits earned from green hydrogen projects and strategic industries. The value-added tax on machinery and equipment imported for industrial production is waived immediately upon production commencement. Goods or services exported or imported by projects in special economic zones are taxed at a “zero” rate.
The government is committed to expediting customs clearance for strategic goods, medicines, petroleum products, fuel, and production essentials for priority sectors. This boosts production, supports the national industry, secures the state’s strategic inventory, and increases the supply of essential goods in local markets. Maait emphasized that from January to December 26, 2023, customs clearance covered numerous goods with a total value of $72.4bn, including strategic goods valued at $19.1bn and production necessities and raw materials valued at $33bn.
