Tax facilities: round two. Finance Minister Ahmed Kouchouk yesterday unveiled the second package of tax facilities, which includes stock market incentives, streamlined tax refund procedures, corporate tax breaks, and more.

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ICYMI- The Madbouly government announced the first package of tax facilities in October 2024, with the aim of simplifying the tax system and easing the burden on taxpayers.

The new package targets compliant taxpayers with the introduction of a whitelist and a premium card, which will grant them priority access to specialized services and added incentives.

Speeding up tax refunds: Under the package, the departments in charge of VAT refunds will be restructured in a bid to simplify and speed up the refunds process. Whitelisted taxpayers will be able to receive their refunds within a week, Kouchouk said.

You heard it here first: Deputy Finance Minister for Taxes Sherif Al Kilani had previously toldEnterpriseAM about the new whitelist system and the efforts to speed up VAT refunds. At the time, he explained that the whitelist will be curated by classifying taxpayers through a highly efficient risk management system.

DATA POINT- Kouchouk said that VAT refunds reached EGP 7.2 bn last fiscal year, up 151% y-o-y, with plans to further increase that figure to support business liquidity.

In a bid to boost private sector participation in strategic projects and make it cheaper for them to access foreign financing, the government will start allowing interest on project-related loans to be deducted from taxable income, reducing financing costs and improving project feasibility. Players working on strategic projects will also be exempt from the cap on deductible loan interest, given the long-term nature of such projects.

A helping hand for industry: The package also extends a temporary tax exemption for imported large-scale production lines that require longer installation timelines to ensure industrial operations remain stable.

Stock market incentives are also in the pipeline: The Finance Ministry will work with the Financial Regulatory Authority to introduce tax incentives aimed at boosting EGX activity for a three-year period, Kouchouk. And while the minister didn’t provide further details on what the incentives might entail, a senior government source recently told EnterpriseAM that the incentives will include scrapping taxes on gains from new listings and amendments to the Investment Law to link exchange listings to investment incentives by the General Authority for Investment and Freezones.

Capital gains tax is out: The government is moving to replace the capital gains tax with a stamp duty to encourage institutional investment in the EGX, Kouchouk said. Our sources had previously told us that the Finance Ministry is looking to collect some EGP 722 mn from the incoming unified 0.125% stamp duty this fiscal year.

Real estate tax is also changing: The government plans to unify the tax treatment for all property transactions by applying a flat 2.5% tax on the contract value of any sale or transfer — even in cases of multiple transactions by the same individual — unless the activity is deemed commercial. The government will launch a new application for property tax filing and payment, enabling taxpayers to easily declare and pay the tax and offset any credit balances through their tax returns.

The package also includes several additional measures aimed at simplifying tax procedures and supporting key sectors. The Finance Ministry will issue a new guide clarifying the tax treatment of exported services and introduce legislative amendments allowing the issuance of temporary tax cards to speed up company formation.

OTHER TAX AMENDMENTS INCLUDE-

  • VAT on medical devices will be reduced from 14% to 5%, while dialysis supplies and filters will be fully exempt;
  • VAT break for medical equipment and machinery will be extended for another four years;
  • Transit goods and related services will be exempted from VAT in a bid to boost transit trade;
  • Unifying the development fee on all types of cement to simplify compliance and improve price stability;
  • Departure fees will be standardized across airports to ease costs for tourism companies operating in multiple locations;
  • Soaps and household detergents will continue to be exempt from VAT to help stabilize prices and reduce consumer burdens — the two products were on the list of products set to lose VAT exemption this fiscal year.

And finally: The Finance Ministry will launch a new online consultation platform to build trust between taxpayers and the Tax Authority alongside a system to finalize company liquidation and closures.

The central clearing system is ready to launch following a pilot phase involving 80 companies.

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