Egypt introduces simplified tax system for small businesses

Egyptian Finance Minister Ahmed Kouchouk announced on Wednesday a new, streamlined tax system for small and micro enterprises, including freelancers and professionals, with annual revenues up to EGP 15 million.

During a press conference today, Kouchouk emphasised the aim to integrate informal sector businesses into the formal economy through a series of facilitative measures.

Under the new system, taxpayers will be allowed to submit or amend tax returns for the periods from 2021 to 2023 without facing penalties.

The tax declarations process will be simplified, and a sample-based audit system will be expanded to cover all tax centres. The tax examination will utilise a risk management system across all tax offices to ease the burden on the tax payers.

Additionally, the new regulations include a cap on late fees, which will not exceed the original tax amount. Efforts will also be made to expedite the resolution of tax disputes and accumulated files.

The threshold for exemption from submitting transfer pricing studies for international companies will be raised to EGP 30 million.

A new centralised settlement mechanism for investors and a simplified VAT refund system will be introduced, aiming to reduce investor burdens and foster a competitive, investment-friendly business environment.

The tax facilitation package also includes a progressive approach to legal action for non-submission of tax returns linked to annual business size, for the benefit of taxpayers.

Attribution: The Egyptian Cabinet

Subediting: M. S. Salama