Companies’ solidarity contribution will continue to be calculated on gross revenue at a rate of 0.025% for the current corporate tax season ending 30 April, a government official tells EnterpriseAM. Despite earlier pledges to overhaul the contribution, the decision to maintain the status quo reflects mounting regional geopolitical pressures that have effectively shelved the reform for this cycle.

REMEMBER- The government had been weighing a shift that would set the contribution at 0.5% to 1% of net income, payable alongside the annual corporate income tax return. This would have replaced the current top-line grab, which hits companies regardless of their profitability.

Why this matters: The contribution remains a primary pain point for some in the private sector, because companies have to pay up even if they’re making losses. While the cabinet had approved shifting the basis to 1% of net income in principle, the draft legislation remains “stuck in the drawer,” according to our source.

The delay is largely driven by concerns that it will create a funding gap for the Universal Health Ins. system, which relies on the contribution for roughly 60% of its revenues. With regional tensions already weighing on the state budget, officials are wary of absorbing any funding shortfalls, particularly as the plan for the next fiscal year involves expanding the system to Minya, one of Egypt’s most populous governorates, we were told.

Looking ahead: While the reform is on ice for this season, it remains on the agenda. The finance and investment ministries have identified 561 fees out of a total of 2.4k currently imposed on the private sector as part of a first-phase plan to unify and streamline costs. The goal remains to eventually link these levies — including the solidarity contribution — to net income once regional conditions stabilize and structural reforms resume.

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