Ahmed Kouchouk, Egypt’s Finance Minister, has announced that a simplified tax system designed to support small and medium-sized enterprises (SMEs), entrepreneurs, and professionals will soon be approved. This initiative is part of the government’s broader effort to drive investment and promote the growth of the private sector, ultimately strengthening Egypt’s economy.
Kouchouk highlighted that the first package of tax reforms will provide practical solutions to address challenges faced by both large and small taxpayers. This new framework marks a significant shift toward fostering trust and collaboration between the government and the tax community. A key component of this package will be the reinstatement of sample-based audits for all taxpayers.
In a recent meeting with the Egyptian Federation of Investors Associations and Institutions, Kouchouk emphasized that the VAT refund system will be simplified, and refund amounts will be doubled. Additionally, new incentives will be introduced to help resolve outstanding tax disputes, with penalties capped at no more than the original tax amount. An advanced electronic settlement system will be established to improve liquidity by facilitating the clearance of receivables and government debts for investors.
The proposed tax system will be particularly beneficial for SMEs, entrepreneurs, and professionals with annual revenues of up to EGP 15 million. It will include a range of incentives, exemptions, and simplifications across various tax areas, including income tax, VAT, stamp duty, and state resource development fees. Notably, exemptions will cover capital gains tax, profit distribution tax, stamp duty, as well as registration and notarization fees.
Kouchouk reiterated the government’s commitment to broadening the scope and impact of its financial policies, with a focus on economic, industrial, and export activities. He revealed that 50% of exporters’ outstanding dues will be paid in cash over four years, starting this fiscal year, with annual payments reaching EGP 8 billion. For the first time, exporters’ dues for 2024/2025 will be settled within the same fiscal year, with the first installment already paid this month. Additionally, half of exporters’ arrears will be cleared through offsets against their future tax, customs, and utility payments.
The Finance Minister also announced that industrial companies will soon have access to facilitated financing for production lines, with the state covering interest rate differentials to support capacity building and economic growth.
Moharam Helal, Chairperson of the Egyptian Federation of Investors Associations (EFIA), praised the Finance Minister’s reforms, expressing his gratitude for the investment-focused approach. He acknowledged that the first package of tax facilitations would address key business challenges and establish a new, trust-based relationship between the tax authority and the business community.
