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Egypt has no plans to alter its tax regime in the near future, a senior government official told EnterpriseAM, emphasizing that maintaining a stable tax policy remains central to the country’s strategy for attracting foreign investment. Recent reports in the regional business press had suggesting that the government was considering new taxes on local companies abroad while avoiding double taxation.
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The reports came amid speculation about government efforts to in the future comply with OECD’s Pillar Two framework, which mandates a 15% minimum effective tax rate in each jurisdiction that multinational corporations with annual revenues exceeding EUR 750 mn are present in. The framework — which Egypt is yet to implement — is a global initiative to combat corporate tax avoidance by preventing multinationals from shifting their reported bottom lines to countries with no or smaller tax burdens.
Egyptian multinationals are seeking clarity about the framework, with many having already approached the government to try to find out its plans to comply with the global initiative, our source told us. However, meeting the framework is not part of the government’s current priorities, with the state instead focused on finalizing tax incentives and resolving outstanding disputes with taxpayers ahead of the upcoming 2025-2030 tax policy framework.
There’s still a lot of work to do before we can fully abide by the Pillar Two framework, especially when it comes to our many freezones and the important place they have in the country’s development plan, our source explained. Egypt is keen to avoid losing its share of tax revenue to other jurisdictions that enforce the 15% levy, but implementing the framework would require renegotiating numerous double taxation agreements with other countries, along with many legislative changes — a process that will take time.
Whatever changes are ahead, a stable tax policy remains the message coming from the government as part of its attempts to assure businesses at home and abroad to up their investments and activities, the senior government source told us.
