The Minister of Finance, Mohammed Moeit, said that there is no increase in tax rates in the draft law on income tax, which is currently being drafted, in coordination with the business community.
Moeit stated that the Egyptian Tax Authority has completed drafting the first version of the draft law, which is currently being revised in preparation for its introduction to community-based dialogue.
He added that the ministry began to communicate with concerned authorities to send their proposals for the new draft law.
The minister stressed that the new draft law will not include any amendments on tax exemptions.
He elaborated that one of the reasons for drafting a new tax law is to remove the current ambiguity of some articles concerning the income tax law, which are problematic for many investors, adding “We also target a tax incentive system for investments, taking into account that taxes contribute 75% of state revenues.”
The simplification of procedures, standardisation and the application of the automation system will lead to little contribution of the human factor in tax estimates, according to Moeit.
Furthermore, Moeit said that the ministry of finance issued orders to two international companies to automate the Egyptian Tax Authority, which may take a year.
Additionally, the minister said that the draft law of small and medium-sized enterprises (SMEs), which was sent to the parliament for discussion, includes tax deductions for projects up to 80%, in addition to imposing a flat tax on entrepreneurs as a kind of facilitation.
He further added that over the next two fiscal years (FYs), the government aims to extend the average government debt to five years from the current four years.
The finance ministry plans to reduce public debt by 2022 to reach 77.5% against the 83% target by the end of the current FY, Moeit said.
The ministry’s plan during the next two FYs aims to reduce Egypt’s public deficit in the budget to 4.7%, in line with international standards,” he pointed out, adding, “By 2030, Egypt will be among the 10 economic tigers, due to its rapid economic growth.”
Moeit pointed out that the government has overcome some crucial issues related to economic development and boosting investments.
Transferring profits abroad previously faced many problems which might have affected foreign direct investments (FDIs), but, currently, the process became very easy and flexible which is clear in the increase of FDIs in Egypt’s local market, he explained.
Moreover, the minister disclosed that the export subsidy reached EGP 6bn instead of EGP 4bn to boost exports and decrease imports.