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FinMin to reduce penalties for late tax payments by up to 90%

A number of tax facilities that have to do with SMEs, simplifying tax procedures, and settling disputes will take effect on 1 March
by enterpriseam adminEgypt Edition
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More tax relief measures near implementation: The Finance Ministry is set to reduce penalties for late tax payments by up to 90% as part of its larger tax relief package, in a move that aims to resolve thousands of disputes resulting from delayed tax return submissions or filing returns without paying the due tax, according to a document seen by EnterpriseAM.

Penalties will be lowered as follows:

  • Penalties of EGP 16.6k will now range from EGP 1.5k-6k;
  • Penalties of EGP 33.3k will now range from EGP 3k-9k;
  • Penalties of EGP 666k will now range from EGP 25k-100k;
  • Penalties of EGP 1.2 mn will now range from EGP 50k-150k.

Remember: A number of tax facilities that have to do with SMEs, simplifying tax procedures, and settling disputes will take effect on 1 March, after President Abdel Fattah El Sisi ratified three new laws earlier this month. The facilities will expand the scope of tax exemptions for small and medium enterprises, simplify tax procedures, and help settle disputes. The Egyptian Tax Authority (ETA) has already opened its online platforms to begin receiving applications and forms related to implementing the new tax relief measures.

The law amendments also introduce a 12.5% compensation rate for uncollected or withheld amounts, in addition to the principal tax amount and late payment fees — a significant reduction from the previous penalty, which involved a payment worth 100% of the due taxes, which led many taxpayers to risk prosecution rather than pay the settlement.

More reforms are on the way: A centralized e-clearance system is set to launch by 2Q 2025, with pilot operations already underway at 50 major companies, informed sources previously told EnterpriseAM.

ALSO- New regulations for tax offenses unrelated to outstanding dues: The Finance Minister or a representative of the ministry will be given the authority to approve settlements that pertain to tax-related offenses that don’t involve outstanding tax dues, with the settlements set to require a compensation payment ranging from half to twice the minimum penalty before a criminal case is filed.

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