{"id":670717,"date":"2025-08-25T00:00:00","date_gmt":"2025-08-25T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/2025\/08\/25\/govt-to-change-up-how-solidarity-contributions-are-calculated\/"},"modified":"2025-08-25T00:00:00","modified_gmt":"2025-08-25T00:00:00","slug":"govt-to-change-up-how-solidarity-contributions-are-calculated","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/egypt\/2025\/08\/25\/govt-to-change-up-how-solidarity-contributions-are-calculated\/","title":{"rendered":"Gov\u2019t to change up how solidarity contributions are calculated"},"content":{"rendered":"

Changing up how solidarity contributions are calculated:<\/strong> The Finance Ministry plans to introduce changes into how solidarity contributions are calculated and paid out, two government sources told EnterpriseAM yesterday. <\/p>\n

The contribution will no longer be paid out on its own<\/strong>, instead it will be integrated into the new unified additional tax on net income \u2014 yet to be finalized \u2014 that the companies will pay alongside the annual income tax. The Finance Ministry will be responsible for distributing the contribution to the relevant authorities.<\/p>\n

REMEMBER-<\/strong> The government is planning<\/a> to replace the myriad and often confusing set of fees faced by investors with a single unified additional tax on net income. The proposed tax will come at a rate of 3-5%, which will be collected with the investor\u2019s tax filing.<\/p>\n

The reasons behind changing the mechanism: <\/strong>Firms are currently facing two main issues with the solidarity contribution \u2014 contribution is calculated based on revenues, not net income, which increases its value and negatively affects companies' liquidity and paying it is a prerequisite for participating in government tenders and auctions, which forces companies to pay it.<\/p>\n

Gov\u2019t to address these issues: <\/strong>Finance Minister Ahmed Kouchouk promised investors to resolve these issues before the next tax season, our sources said. The ministry will shut down the separate electronic procedures on the Egyptian Tax Authority\u2019s system for paying the solidarity contribution.<\/p>\n

As things stand:<\/strong> The solidarity contribution is currently calculated based on gross revenues. Shifting the calculation to net profit requires legislative changes, which fall under the purview of the Investment Ministry and the Universal Health Ins. Authority, Egyptian Tax Authority head Rasha Abdel Aal told us<\/a> earlier this year. Once these changes are made, we can adjust the mechanism in time for the next tax filing season, Abdel Aal noted at the time.<\/p>\n

ALSO- <\/strong>Firms will see a significant reduction in the fee they have to pay to the Manpower Ministry\u2019s training fund \u2014 the fee will be slashed to 0.25% of their post-tax net income from the current 1%. The fee will be eliminated entirely for the firms that can prove they provide accredited training and qualification programs for their staff, the sources added.<\/p>\n

Need a refresher? <\/strong>The cabinet agreed<\/a> last October to change how the solidarity contribution is calculated. The amendments included a 0.25% healthcare tithe to fund the universal healthcare system calculated based on companies\u2019 net income, instead of their total revenues. However, this was met with concerns from the Universal Health Ins. Authority.<\/p>\n","protected":false},"excerpt":{"rendered":"

The contribution will be integrated into the new unified additional tax on net income<\/p>\n","protected":false},"author":1,"featured_media":670718,"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":[7382],"tags":[72,276,69],"brand":[],"newspack_spnsrs_tax":[],"class_list":["post-670717","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-tax","tag-enterpriseam","tag-finance-ministry","tag-tax","wpautop","entry"],"acf":{"mongo_id":"535be9bb-8382-432d-8798-c27236d71999","order":"4","is_powered_by":false,"story_type":"1","photo_url":"https:\/\/ent.news\/2025\/2\/2510.jpg","photo_position":"above","homepage_title":"","full_issue_title":"Egypt to change up how solidarity contributions are calculated","related_issue":[670712],"teaser":"The contribution will be integrated into the new unified additional tax on net income","voice_url":"https:\/\/s3.us-east-1.amazonaws.com\/ent.news\/audio\/2025\/8\/.d0f639d2-f25b-4d9e-b1bc-ff8cdfdd504c.mp3"},"yoast_head":"\nGov\u2019t to change up how solidarity contributions are calculated - 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\/2025\/08\/25\/govt-to-change-up-how-solidarity-contributions-are-calculated\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Gov\u2019t to change up how solidarity contributions are calculated\" \/>\n<meta property=\"og:description\" content=\"The contribution will be integrated into the new unified 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