Finance Ministry’s tax moves seen bolstering investor confidence in Egypt
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Egypt’s latest wave of tax reforms is winning praise from the business community, as policymakers aim to stabilise the investment climate and draw more companies into the formal economy.
The Ministry of Finance’s recent steps, including the expansion of the tax net to bring more small and medium-sized enterprises (SMEs) into the formal economy, are being described as “long-awaited” by veteran business journalist Patrick FitzPatrick, co-founder and editor-in-chief of Cairo-based business publication Enterprise.
“For businesses to thrive, they require two things above all else: stable policies and equal opportunities,” FitzPatrick wrote in a commentary published this week.
The shift includes a move to calculate the solidarity contribution based on net profit rather than gross revenue, a change widely welcomed by companies. The rollout of an electronic invoicing system is also expected to increase transparency and level the playing field between formal and informal businesses.
Still, FitzPatrick noted areas that need further attention, including the return of random sample inspections and stronger training for tax officials to ensure consistent enforcement.
He also called for tax incentives to extend beyond traditional sectors like tourism and real estate to future-facing industries such as global capability centres, which offer a faster route to generating foreign currency revenues.
Another sticking point is a 20 per cent tax imposed on Egyptian buyers of tech services from international platforms—something FitzPatrick says disproportionately affects SMEs that rely heavily on foreign software and tools.
The reform drive comes as Egypt looks to shore up foreign investment under an International Monetary Fund (IMF)-backed economic reform programme, while positioning the private sector as a primary engine of growth.
Attribution: Amwal Al Ghad English