{"id":650796,"date":"2024-10-10T00:00:00","date_gmt":"2024-10-10T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/2024\/10\/10\/govt-unveils-the-first-part-of-a-wider-package-of-tax-facilities\/"},"modified":"2024-10-10T00:00:00","modified_gmt":"2024-10-10T00:00:00","slug":"govt-unveils-the-first-part-of-a-wider-package-of-tax-facilities","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/egypt\/2024\/10\/10\/govt-unveils-the-first-part-of-a-wider-package-of-tax-facilities\/","title":{"rendered":"Gov't unveils the first part of a wider package of tax facilities"},"content":{"rendered":"<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"> <strong>Tax <\/strong><strong>facilities<\/strong><strong> 1.0: <\/strong>The Madbouly government announced a long list of tax facilities during a presser yesterday (<a target=\"_blank\" href=\"https:\/\/youtu.be\/fm6_7TaliLA?si=wQLe2hGRvdRXU6gG\" style=\"\" rel=\"noopener\">watch, runtime: 1:20:21<\/a>). Finance Minister Ahmed Kouchouk yesterday <a target=\"_blank\" href=\"https:\/\/www.facebook.com\/EgyptianCabinet\/posts\/pfbid0213WnXLk3mz7mYqdn34pwcfCrp2NDbPhYVvJWgs6AfsRW9P3SXB2Q6PemFXkKx4Wjl\" style=\"\" rel=\"noopener\">unveiled<\/a> the first phase of a package of tax facilities aimed at simplifying the tax system and easing the burden on taxpayers.<\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\">(<strong>Tap or click the headline above to read this story with all of the links <\/strong>to our background as well as external sources.)<\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>Everyone weighed in:<\/strong> The package was discussed with representatives from key players in the economy \u2014- over the past three weeks, Kouchouk held meeting with representatives from the Federation of Egyptian Industries, the Federation of Egyptian Chambers of Commerce, the Egyptian Tax Society, and the Micro, Small and Medium Enterprise Development Agency, among many others. The package was amended based on the discussions held to meet the needs of taxpayers and investors.<\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>Remember: <\/strong>Kouchouk and Prime Minister Moustafa Madbouly gave us a glimpse into the <a target=\"_blank\" href=\"https:\/\/enterprise.news\/egypt\/en\/news\/story\/807171d5-8e33-400a-b8de-8529aaf832b0\/new-tax%253cmark%253e-incentives%253c%2Fmark%253e-seek-to-ease-burdens-for-taxpayers,-resolve-disputes,-and-incorporate-more-taxpayers-into-the-system\" style=\"\" rel=\"noopener\">tax facilities<\/a> last month. <\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>An ambitious implementation timeline: <\/strong>Kouchouk promised that we\u2019ll see the entire package implemented during the current fiscal year ending June 2025.<\/p>\n<p class=\"tag-border-left\">0.25% HEALTHCARE TAX REVISED- <\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"> <strong>The cabinet agreed to change up how the solidarity tax is calculated<\/strong>, Investment Minister Hassan El Khatib <a target=\"_blank\" href=\"https:\/\/www.asharqbusiness.com\/economics\/56270\/%D8%AA%D8%B7%D8%A8%D9%8A%D9%82-%D8%B6%D8%B1%D9%8A%D8%A8%D8%A9-%D8%A7%D9%84%D9%85%D8%B3%D8%A7%D9%87%D9%85%D8%A9-%D8%A7%D9%84%D8%AA%D9%83%D8%A7%D9%81%D9%84%D9%8A%D8%A9-%D8%B9%D9%84%D9%89-%D8%A3%D8%B1%D8%A8%D8%A7%D8%AD-%D8%A7%D9%84%D8%B4%D8%B1%D9%83%D8%A7%D8%AA-%D9%81%D9%8A-%D9%85%D8%B5%D8%B1\/\" style=\"\" rel=\"noopener\">said<\/a>. The amendments will see the 0.25% healthcare tithe to fund the universal healthcare system calculated based on companies\u2019 net income, instead of their total revenues. The amendments are now being discussed with various stakeholders, said El Khatib.<\/p>\n<p class=\"tag-border-left\"> FOUR KEY GOALS-<\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>The package introduces 20 key reforms all revolving around four primary <\/strong><strong>goals:<\/strong> easing tax and financial burden on taxpayers, unifying and improving tax services, and clearing the backlog of tax disputes, according to a <a target=\"_blank\" href=\"https:\/\/ent.news\/2024\/10\/797.pdf\" style=\"\" rel=\"noopener\">presentation<\/a> Kouchouk shared during his presser. <\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>Here\u2019s a rundown of the most important reforms:<\/strong><\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>A simplified tax system for SMEs:<\/strong> Businesses with an annual turnover of up to EGP 15 mn will pay a simple flat tax \u2014 that starts at an annual EGP 1k and goes up to EGP 225k depending on how much they are making \u2014 that covers income tax, value-added tax, duty tax, and others. <\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>Two sweeten the pot further: <\/strong>Eligible businesses will not be audited for five years and will not be asked to pay back taxes compiled prior to joining the formal sector. They will also submit quarterly VAT returns instead of monthly VAT returns and labor income taxes will be settled annually, rather than 17 times a year \u2014 12 monthly settlements, four quarterly, and one annual.<\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>We knew this was coming: <\/strong>Deputy Finance Minister for Taxes Sherif Al Kilani, last month, <a target=\"_blank\" href=\"https:\/\/enterprise.news\/egypt\/en\/news\/story\/ac6ccbc9-8a6a-49a0-a183-7d6b35e510b7\/smes-are-getting-a-boost-with-new-targeted-tax-incentives-package\" style=\"\" rel=\"noopener\">spoke to Enterprise<\/a> about the facilities telling us that they \u201crepresents a major shift in dealing with taxpayers.\u201d<\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>Launching a central clearing system <\/strong>to settle taxpayers\u2019 obligations and dues to government entities, including non-tax and customs entities. <\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>Putting a cap on late payment penalties<\/strong> so that the penalty does not exceed the original amount of tax due. The government will also scrap any late fees due to audit delays or drawn-out disputes.<\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>Efforts to integrate the informal economy: <\/strong>The government will not ask businesses to pay any taxes prior to their integration into the formal economy in its efforts to push more businesses to go formal. <\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>A second chance:<\/strong> Taxpayers who failed to submit their tax reports between 2020 and 2023 will be allowed to file them within a specific time frame without facing any penalties. Leniency for erroneous returns filed between 2020 and 2023, which can be corrected and refiled without penalty.<\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>Renewing the Tax Dispute Resolution Law:<\/strong> The cabinet, back in June, <a target=\"_blank\" href=\"https:\/\/enterprise.news\/egypt\/en\/news\/story\/576f7420-3e6e-43d5-9cb1-c04f858a3586\/cabinet-approves-amea-power%25e2%2580%2599s-renewable-energy-plans\" style=\"\" rel=\"noopener\">approved<\/a> a draft decision to renew the Tax Dispute Resolution Law until January 2025. The extension has been forwarded to the House since and is awaiting its approval. <\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>The details: <\/strong>The law, which had <a target=\"_blank\" href=\"https:\/\/enterprise.press\/stories\/2016\/09\/01\/parliament-approves-law-on-resolution-of-tax-disputes\/\" style=\"\" rel=\"noopener\">passed the House in September 2016<\/a>, removes tax dispute cases from the courts and hands them over to committees to seek amicable settlements. The law was originally limited to a one-year period but has been extended time and time again. Some <a target=\"_blank\" href=\"https:\/\/enterprise.news\/egypt\/en\/news\/story\/08a4539d-f710-47fb-b8ea-3c9af2c681ea\/turkish-usd-700-mn-denim-factory-gets-gov%25e2%2580%2599t-greenlight.-plus:-ades-inks-drilling-contract,-forbes-international-tower-to-cost-usd-1-bn,-sahl-eyes-digital-banking-license,-alwady-green-heads-to-ksa\" style=\"\" rel=\"noopener\">17k disputes<\/a>, amounting to over EGP 15.5 bn, have been settled in the ten months between August 2023 and May 2024.<\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>Also part of the facilities: <\/strong>Efforts to make it easier for taxpayers to receive their VAT refunds, raising the threshold for requiring transfer pricing studies for transactions between related entities has been doubled to EGP 30 mn annually, and simplifying the process of filing tax returns, sharing audit guidelines ahead of time. <\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>The first of many?<\/strong> Kouchouk earlier this week said that the government will introduce new incentives supporting the private sector following the implementation of the current package.<\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\">\n<p class=\"tag-border-left\">OUR FIRST LOOK AT THE NEW EXPORT SUBSIDY PROGRAM- <\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"> <strong>What can we expect from the revamped export subsidy program?<\/strong> The revamped program aims to enhance transparency by clearly reflecting the allocated budget for it, Investment Minister Hassan El Khatib <a target=\"_blank\" href=\"https:\/\/www.facebook.com\/EgyptianCabinet\/posts\/pfbid0gSQfbYZriaCBaUSEWHwteqUuY4mBNP3cnEtdj5YTHDSfiGE8sg6ZjUkbdBySTV9Tl\" style=\"\" rel=\"noopener\">said<\/a> yesterday. The new program will also prioritize high value-added products and offer more than cash payouts \u2014 it will offer land and tax breaks. The state will allocate a specific amount for each export sector, the figure will increase when the sectors increase their local component ratio. <\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>Faster payouts: <\/strong>The revamped program will ensure payouts are disbursed no more than three months after the required paperwork is done. <\/p>\n","protected":false},"excerpt":{"rendered":"<p>The package focuses around four key goals<\/p>\n","protected":false},"author":1,"featured_media":650797,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"newspack_ads_suppress_ads":false,"newspack_popups_has_disabled_popups":false,"newspack_sponsor_sponsorship_scope":"","newspack_sponsor_native_byline_display":"inherit","newspack_sponsor_native_category_display":"inherit","newspack_sponsor_underwriter_style":"inherit","newspack_sponsor_underwriter_placement":"inherit","ep_exclude_from_search":false,"_primary_brand":0,"newspack_featured_image_position":"","newspack_post_subtitle":"","newspack_article_summary_title":"Overview:","newspack_article_summary":"","newspack_hide_updated_date":false,"newspack_show_updated_date":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[8507],"tags":[104,72,100,287],"brand":[],"newspack_spnsrs_tax":[],"class_list":["post-650796","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-policy","tag-economy","tag-enterpriseam","tag-policy","tag-smes","wpautop","entry"],"acf":{"mongo_id":"5f12da9a-48e0-44e3-9c2f-853b7d1ff045","order":"4","is_powered_by":false,"story_type":"1","photo_url":"https:\/\/ent.news\/2024\/10\/803.jpg","photo_position":"above","homepage_title":"","full_issue_title":"Gov't unveils the first part of a wider package of tax facilities","related_issue":[650791],"teaser":"The package focuses around four key goals","voice_url":"https:\/\/s3.us-east-1.amazonaws.com\/ent.news\/audio\/2024\/10\/.37ff91f5-00c8-4c92-9cb8-9ab84f509ce1.mp3"},"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.1 (Yoast SEO v27.1.1) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Gov&#039;t unveils the first part of a wider package of tax facilities - EnterpriseAM Egypt<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/enterpriseam.com\/egypt\/2024\/10\/10\/govt-unveils-the-first-part-of-a-wider-package-of-tax-facilities\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Gov&#039;t unveils the first part of a wider 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