The Madbouly government is preparing to roll out a fresh set of reforms to simplify procedures for investors and position Egypt as a more attractive destination for local and foreign investors, according to an Ittihadiya statement. The state is currently surveying fees imposed by 67 administrative bodies with the goal of consolidating and reducing them, two government sources told EnterpriseAM. We were the first to pick up news of the plan back in December.

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The government is planning to replace many of the various fees charged by different entities with a single unified additional tax on net income, which aims to streamline the tax system and reduce the administrative burden on businesses. A digital platform will also be launched to consolidate fee and tax collection under two or three entities, with all payments funneled through the new system to simplify compliance and increase efficiency, we were told.

This additional tax on net-income is expected to come in at around 2-3%, our government sources told us. The final figure, however, will be worked out by soon-to-be-formed committees that will attach themselves to government bodies that interact with investors to try to catalogue and rationalize the many fees that investors face.

Some could see the amount of fees and charges they cough up fall by 50%, as many investors are currently charged twice for certain permits or services by different government bodies. The new system will be administered by the finance and investment ministries and oversee the issuance of commercial and industrial registrations, environmental and fire safety certificates, importers’ licenses, chambers memberships, traffic permits, economic hardship funds for workers, and more.

But despite the reduction in fees, the government thinks the new plan could double its annual turnover rate, as the new system will encourage more investment and help projects increase earnings, one of our government sources told us.

A shake-up to how direct taxes are calculated is also part of the plan, with income tax, taxes on unlisted shares, and the stamp duty to be unified as a single tax, our source told us. This would unify some 55% of taxes, our source added.

The new plan will increase transparency and tax policy stability — two important factors that currently persuade many not to invest — we were told. “This is a positive and well-timed step,” Food Export Council head Ashraf El Gazayerli told EnterpriseAM, adding that he expects the move to lower costs and boost food exports by 15%. Federation of Chambers of Commerce’s Internal Trade Committee of the Importers Division head Matta Bishay also told EnterpriseAM that the SME economy could also witness growth on the back of the fairer and more predictable tax system. The new system should be good news for exports, according to Cairo Chamber of Commerce’s Exporters Division head Ahmed Zaki, who told us that a “stable and clear tax system” would increase exports.

And speaking of exports, faster customs clearance is also part of the plan, with the aim to cut customs clearance times to six days from eight. To facilitate that, customs offices will remain operational during weekends and public holidays, and businesses will be able to pay fees after banks’ working hours.

But for the new plan to work, it has to be implemented well, industry insiders told us. Export Council for Building Materials head Walid Gamal El Din said enforcement is key, warning that some agencies may try to add new fees later.

We should know more soon with the long awaited and much anticipated tax policydocument set to be unveiled by the Finance Ministry. The initially outlined plan — which shares a lot of similarities with this most recent iteration — is part of a wider package of measures aimed at attracting foreign investments and changing the overall investment climate in Egypt.

The plan received extensive — and positive — coverage on the airwaves last night, with the initiative widely welcomed as an important step to improving the country’s investment climate by hosts and guests alike. Federation of Egyptian Industries’ tax committee head Mohamed El Bahy told Kelma Akhira’s Lamees El Hadid that the directive addresses one of main issues facing investors in Egypt — the lack of transparency and clarity about the true costs of a project. “Egypt’s core challenge today is attracting more FDI — and that won’t happen unless investors know the full cost upfront,” El Bahy said.

El Bahy also stressed that small companies won’t be taxed like larger ones, as “every [business] will pay based on its income. Someone making EGP 100 mn isn’t the same as someone making EGP 1 mn. The rate is fixed, but the outcome reflects the size of the business” (watch, runtime: 1:42).

Less paperwork and more investment was the message on Azza Moustafa’a Al Sa’aa Al Sadesa’. Egyptian Tax Society head Yasser Maharem told Moustafa the unified tax system will mean that investors can focus on launching projects and not dealing with bureaucracy (watch, runtime: 4:25). National Dialogue private investment committee member Samir Sabry similarly told Al Hayah Al Youm’s Lobna Assal that the move responds to a long-standing call from the private sector and will help boost production, exports, and job creation (watch, runtime: 6:50).

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