Gov’t mulls raising the tax exemption threshold: Raising the personal income tax exemption threshold is currently “under consideration” in light of recent economic changes, Deputy Finance Minister for Taxes Sherif Al Kilani reportedly told Al Arabiya last week.

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Part of a bigger social support package: The move — which follows March’s increase of the threshold from EGP 45k to EGP 60k — could come as part of the government’s upcoming package of social protection measures, which will be aimed at mitigating the impact of inflationary pressures on Egypt’s most vulnerable, Finance Minister Ahmed Kouchouk said last week. The government is gearing up to announce the new social protection package in September, with plans to begin implementing it in October, two government sources told us last week.

That’s not all though — we may be headed toward a tax bracket overhaul: The government is also studying shifting tax brackets up in light of continued inflationary pressures, a government source tells Enterprise. Al Kilani told reporters last week that raising the tax exemption limit is being considered as part of a package of reform measures, without providing further details.

What would the new tax pyramid look like? The expected changes in income tax brackets would be progressive, with the tax exemption threshold and zero-tax bracket potentially rising by 20-25% to match inflation rates, our source said. This would be accompanied by upward adjustments to other brackets.

Expanding the tax base: To offset the tax losses from raising tax exemption limits and easing the burden on low earners, efforts are underway to increase the number of registered taxpayers, the source said.

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