{"id":583706,"date":"2023-03-20T00:00:00","date_gmt":"2023-03-20T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/2023\/03\/20\/yet-another-income-tax-exemption-increase-plus-govt-trims-growth-forecast\/"},"modified":"2023-03-20T00:00:00","modified_gmt":"2023-03-20T00:00:00","slug":"yet-another-income-tax-exemption-increase-plus-govt-trims-growth-forecast","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/egypt\/2023\/03\/20\/yet-another-income-tax-exemption-increase-plus-govt-trims-growth-forecast\/","title":{"rendered":"Yet another income tax exemption increase. PLUS: Gov\u2019t trims growth forecast."},"content":{"rendered":"

<\/span>A more generous income tax break could be in the offing: <\/span>President Abdel <\/span>Fattah El Sisi has directed the government to raise the personal income tax exemption <\/span>threshold to EGP 36k from EGP 24k currently, <\/span>Ittihadiya<\/a><\/span>said yesterday. <\/span>Companies account for the majority of what the government collects under the tax, charging and remitting it as wage taxes on every person they employ.<\/span><\/p>\n

This is more than we expected:<\/span> The government <\/span>said earlier this month<\/a><\/span> that it plans to raise the exemption threshold to EGP 30<\/span>k from 1 April. <\/span><\/p>\n

SOUND SMART- There are technically two income tax exemptions in Egypt.<\/span> Everyo<\/span>ne, <\/span>regardless of income, pays no tax on the first EGP 9k of their income. People who earn less EGP 600k a year also have a 0% tax band on top of that, which is currently set at EGP 15k. Together, these exemptions mean that employees in the lowest income bracket are not subject to wage taxes on the first EGP 24k of their income.<\/span><\/p>\n

Both of these exemptions will increase under the proposed changes:<\/span> The personal <\/span>allowance will increase from EGP 9k to EGP 15k, and the 0% tax band will rise from EGP 15k to EGP 21k. This will mean that lower earners will pay no tax on the first EGP 36k of their incomes. <\/span><\/p>\n

The changes are<\/span> expected to impact some 22 mn <\/span>people<\/span>, <\/span>a <\/span>source at the Finance <\/span>Ministry told Enterprise yesterday. <\/span><\/p>\n

The new higher rate tax band is here:<\/span> Taxpayers earning more than EGP 800k a year will pay <\/span>tax at a new higher rate of 27.5% under the changes, the source told us. We first heard about the proposals for a new higher rate tax band <\/span>last year<\/a><\/span>.<\/span><\/p>\n

Anything over EGP 36k will be taxed according to the following rates<\/span> (inclusive of the EGP <\/span>9k personal allowance), our source told us:<\/span><\/p>\n