The second package of tax facilities will include 25 new tax measures, Deputy Finance Minister for Taxes Sherif Al Kilani told EnterpriseAM, explaining that more may be added or pushed back before the package is launched. The package is currently being fast-tracked ahead of being released for public dialogue — business community dialogue sessions on the package started in mid-September.

REMEMBER- It first came to light in September of last year that the government is readying another tax relief package, one targeting the real estate sector, shortly after it unveiled the first package of tax facilities aimed at simplifying the tax system and easing the burden on taxpayers. Finance Minister Ahmed Kouchouk said in August that the second package of tax relief measures will be put up for community dialogue in October, pending parliamentary approval of some aspects.

The big picture: The new package is primarily focused on resolving issues experienced by the tax community when it comes to following the VAT Law through introducing new facilities and removing hurdles facing businesses, Al Kilani told us.

An innovative mechanism for instant tax refund: The Finance Ministry will introduce a new mechanism for instant tax refunds, eliminating the current three-month waiting period for certain investors, Al Kilani said. This new system, which allows eligible investors to receive their tax refunds immediately upon submitting their application and export invoices, aims to enhance liquidity, he added.

Who’s eligible? Taxpayers must demonstrate a history of compliance, with no prior lawsuits for tax evasion, a low rate of discrepancies in audits, and a consistently high rate of tax performance to be eligible for instant tax refunds, Al Kilani added. The ministry is now working on creating a whitelist by classifying taxpayers through a highly efficient risk management system, according to Al Kilani.

There will be no changes to the VAT registration threshold — currently set at EGP 500k —, Al Kilani said. There have been requests from the business community to increase the threshold so it is more in tune with current inflation levels.

In response to calls from the business community, the ministry will extend the deadline given for companies to submit pre-2020 tax dispute settlement requests, Al Kilani said. The deadline was extended for a renewable six-month period — it was previously set to expire on 12 August.

REFRESHER- Tax revenues saw their fastest growth in years, rising 35.3% y-o-y to EGP 2.2 tn last fiscal year, which Finance Minister Ahmed Kouchouk attributed to tax measures introduced to widen the tax base and create a more efficient tax system.

Package of custom breaks is also being expedited ahead of being put up for community dialogue.

What’s next? Since both the tax and customs packages require legislative amendments, they will be up for public dialogue and then head to the House for approval, according to the Al Kilani said.

Where’s the long-anticipated package of real estate tax relief? The package has secured the green light from the cabinet after its completion, he said, adding that it currently awaits the House’s approval.

Tags: