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The Finance Ministry has no plans to further extend the deadline given for companies to submit pre-2020 tax dispute settlement requests, with the deadline expiring on Tuesday, August 12, a senior government source told us on Thursday.
Extending the deadline requires a legislative amendment, as the law only permits a three-month extension, the source said. The initiative is part of the first package of tax facilities issued in February.
REMEMBER- The Finance Ministry is rolling out measures to make it more attractive for businesses to settle disputes dating to before 2020, including by paying a fixed percentage of taxes owed. Businesses will be able to make payments in four installments over a 12-month period without paying late fees or additional interest charges.
The first tax facilities initiative has had a significant impact, receiving a total of 113.5k applications as of June 19, according to data reviewed by EnterpriseAM. Additionally, around 52.9k applications were submitted to join the small and medium-sized enterprises system from businesses with an annual turnover of less than EGP 20 mn.
The Egyptian Tax Authority (ETA) received around 107k applications for tax dispute settlements, making up the majority of the total applications submitted. So far, 9.1k of these applications have been settled. From these settlements, 2.5k taxpayers paid a total of EGP 880 mn, compared to a total due amount of EGP 6 bn prior to the settlements — reflecting total reductions of around EGP 5.1 bn. Requests to settle disputes related to real estate transaction tax accounted for 5.8k applications.
The ETA is waiving fees and additional taxes for around 90.2k companies. These are businesses where accumulated fines surpassed 100% of the original amount. In total, the ETA has waived EGP 9.7 bn for these firms.
The Finance Ministry received 94.2k amended tax returns, generating a total of EGP 54.7 bn in tax differences for the public treasury. This is part of the ministry’s initiative that allows taxpayers to amend previous years’ returns without penalty.
The tax revenues are expected to see robust growth following the expiration of the legal deadline for the tax facilities initiative, our source said. The government is looking to secure an additional EGP 195.2 bn in tax revenues — equivalent to 0.98% of GDP — in FY 2025-2026 through a bundle of tax reforms, the IMF said last month.
