Where does the long-awaited tax policy stand? The Finance Ministry is in the process of updating its tax policy framework so that it is more attractive to potential investors, a senior government source told Enterprise.

What’s next? The policy will be presented for public consultation this quarter to be ready in 1Q 2025.

As instructed: In May, Prime Minister Moustafa Madbouly instructed that the tax policy document be sent to members of the National Dialogue, Chambers of Commerce, and business associations for feedback.

The policy is expected to boost tax revenues: The government expects its tax revenues to jump by around EGP 100 bn once the new policy is put in place, as a result of incorporating the informal economy and encouraging further investment, our source tells us. The government plans to collect EGP 2.0 tn in tax revenues — amount to 77% of total revenues — during the current fiscal year.

Among the main provisions of the new tax policy document:

  • GAFI has the final say: No new taxes will be introduced without prior consultations with the General Authority for Investment and Freezones (GAFI);
  • Foreign investors will get the same tax rate they signed up for: Foreign investors will be subject to the same tax rate that existed when they began their respective projects and investments, and won’t be affected by any future tax amendments.

The goal is to create a sense of certainty for investors: The Finance Ministry is aiming for the document to provide more tax clarity for both local and foreign investors, so as to help them plan their future investments with a greater degree of certainty.

The key to attracting investors: A clear and distinct tax system is the best way to attract new investors — it is more effective than introducing tax incentives that “distort the investment climate,” the source said.

DATA POINT- Egypt’s tax rates are well below the global average, which stands at around 23.37% among 180 countries surveyed. Egypt is looking to maintain that competitive edge in efforts to attract foreign investors, the source added.

Remember: The tax policy has been in the works for some time now and last we heard of it was in April when Madbouly and then-Finance Minister Mohamed Maait held discussions over it, The policy will be used to inform and provide clarity to businesses, investors, and society at large on the country’s targets, policies, and plans for taxation over the next six years, with the government aiming to have the document support individuals as they build their investment strategies, create forecasts, financial models, and feasibility studies with a greater degree of tax certainty.

Read more: We have more details in our previous coverage of the tax policy.

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