House committees sign off on key bills: The proposed cut to income tax, the second round of the expat car import scheme, and the decision to allow Abu Dhabi Ports to develop Safaga port were all approved by House committees yesterday.

#1- Tax cuts: The House Budget Committee approved amendments to the Income Tax Act that would raise the tax exemption thresholdby 25% to EGP 45k from EGP 36k. The measure was announced by President Abdel Fattah El Sisi last month as part of a package of measures aimed at reducing the impact of soaring inflation on low earners.

SOUND SMART- There are technically two income tax exemptions in Egypt. Everyone, regardless of income, currently pays no tax on the first EGP 15k of their income. People who earn less EGP 600k a year also have a 0% tax band on top of that, which is currently set at EGP 21k. Together, these exemptions mean that employees in the lowest income bracket are not subject to wage taxes on the first EGP 36k of their income.

Anything over EGP 45k (inclusive of the EGP 15k personal allowance) will be taxed according to the following rates:

  • Incomes between EGP 45,001-60,000 will be taxed at 10% ;
  • The following EGP 60,001-75,000 will be taxed at 15% ;
  • The following EGP 75,001-215,000 will be taxed at 20% ;
  • The following EGP 215,001-415,000 will be taxed at 22.5% ;
  • The following EGP 415,001-EGP 1.2 mn will be taxed at 25% ;
  • Anything above EGP 1.2 mn per year will be taxed at 27.5%.

The changes are expected to impact some 13 mn people from the higher tax exemptio n, one MP said yesterday.

Remember: This is the second time the exemption has been raised this year after the government lifted it from EGP 24k to EGP 36k.

#2- The expat car initiative: A draft bill allowing the government to reopen its expat car import initiative for three months to raise much-needed FX was given a preliminary stamp of approval by the House Budget Committee.

What happens now? The bills will be put up for discussion and voted on when the House reconvenes on 15 October.

#3- Abu Dhabi Ports one step closer to Safaga: The House Transport Committee approved a draft bill allowing the Transport Ministry to hand Abu Dhabi Ports a con cessi on to build, manage, operate, and maintain a multipurpose terminal at the Red Sea port of Safaga. The ministry wants to upgrade Egypt’s ports with the help of international companies with expertise in port management and operation, the bill’s explanatory note said.

Tags: