Egypt unveils 1st tax facilitation package to strengthen investor relations

Updated 9/12/2024 3:57:00 AM

Arab Finance: The Egyptian government has launched a comprehensive tax facilitation package to improve the relationship between the Egyptian Tax Authority (ETA) and the business community, per a statement on September 12th.

Minister of Finance Ahmed Kouchouk announced the initiative during a press conference held at the government headquarters in the New Administrative Capital, in the presence of Prime Minister Mostafa Madbouly.

This package is the first in Egypt’s efforts to streamline tax operations and stimulate the economy, with a focus on controlling and enhancing the relationship between investors and the Tax Authority.

The facilitation package will simplify and integrate the tax system for small and micro projects with annual business volumes not exceeding EGP 15 million, covering entrepreneurs, freelancers, and professionals.

It includes measures to stimulate the integration of informal economy projects into the formal sector, with a focus on future improvements rather than past challenges.

Additionally, taxpayers will be allowed to submit or amend tax returns from 2021 to 2023 without facing penalties.

The simplification of tax returns and expansion of the sample inspection system will now include all tax centers.

The tax inspection process will be guided by a risk management system for taxpayers in all tax offices and regions, making tax compliance easier for businesses.

Kouchouk also noted that the delay fees had previously been multiples of the original tax, but now a maximum limit will be set, which will never exceed the value of the original tax itself.

Efforts will be made to swiftly resolve disputes and accumulated tax files to boost economic activity.

Moreover, the exemption limit for submitting transaction pricing studies for international companies will be raised to EGP 30 million.

A new central settlement mechanism for investors will be implemented, and the value-added tax (VAT) refund system will be simplified to reduce burdens on businesses and encourage investment.

In terms of legal procedures, the Finance Minister explained that there will be gradual enforcement for cases of failure to submit tax returns, with actions being tied to the annual business volume of taxpayers.

This aims to benefit businesses while ensuring legal compliance.

Kouchouk also discussed plans to invest significantly in improving the efficiency of ETA's employees.

The Ministry of Finance will establish a modern and integrated system for evaluating employees based on performance metrics and the quality of services provided to taxpayers.

Kouchouk stressed that the package reflects the government's seriousness in addressing the challenges faced by the tax community and aims to meet their needs.