Big reforms to the tax and customs systems are in the works: The government is mulling a permanent exemption for factories from property taxes and either raising the residential tax exemption cap or doing away with it altogether for first homes, Deputy Finance Minister for Taxes Sherif Al Kilani told EnterpriseAM. The measures are part of a broader plan to revamp the property tax law and resolve ongoing disputes.

Factories in the clear: While factories already enjoy a temporary three-year exemption introduced in 2022 and extended for key sectors until the end of 2026, Al Kilani said the government is now exploring a permanent exemption as part of its push to bolster local industry, reduce costs, and promote industrial growth. There are also other alternatives on the drawing board, with consultants set to be hired to undertake a thorough data-driven study.

There’s also some encouraging news for factories built on non-industrial land: The state is looking into legalizing the status of factories built on non-industrial land that kicked off operations before October 2023 and meet certain requirements, according to an Industry Ministry statement out earlier this week.

The tax man may also soon be taking a different approach to residential properties: The law currently sets an exemption limit of EGP 2 mn for residential properties, a threshold that Al Kilani says is outdated due to inflation and rising property prices. The ministry is considering either raising the cap or exempting private family residences entirely, while taxing additional properties. A phased rollout of the revised law is under consideration, starting with areas that have seen significant urban expansion, such as the North Coast, Sheikh Zayed, and the Fifth Settlement, before expanding nationwide, Al Kilani told us.

Property tax may soon undergo a digital transformation: The ministry plans to launch an automated platform to simplify property tax management. A consultancy firm will be hired to oversee its implementation and ensure it aligns with market realities, according to the deputy minister

Changes to customs procedures are also in the cards: The government is also revisiting customs procedures to align with global standards and improve efficiency. There is also a plan to create deterrences for those trying to cheat the system that do not rely on fines that some importers simply use as a way to circumvent customs procedures for a fee. Alongside this, Egypt plans to introduce a four-tier system — green, red, blue, and orange — for importers, allowing for faster clearance for compliant businesses. Currently, only the green and red pathways are used, leading to delays.

Tightened oversight is part of the plan: Temporary admission, duty drawbacks, and other customs exemptions are being restructured to close loopholes and ensure fair competition. The changes aim to address issues such as abuses in exemptions for disabled vehicle imports, while responding to the business community’s demands for transparency, Al Kilani told us.

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