Submitting Egyptian income tax returns online made mandatory as of 2021 – FinMin

Egyptian income tax payers will be committed to submit their returns online as of January 2021, the Ministry of Finance announced on Wednesday.

The action was taken in accordance with the Minister of Finance’s decree no. 296 for 2020, which amends regulations in the income tax law, the ministry said in a statement.

The decree will be applied on individuals practicing commercial, industrial, professional, and real-estate activities and who have investments in stock markets, bonds, and T-bills, according to the decree.

The new amendments make submitting returns online mandatory, while it was optional during the past few months amid the COVID-19 crisis.

The ministry said this action comes under the government’s policy of adopting digital transformation, and that it accelerates tax examination procedures.

The personal income tax rate in Egypt has been 22.5 percent since 2016.

In April, Egypt’s cabinet approved amendments to the income tax law, which was approved by parliament in May.

The amendments involve applying a new income tax system as of the financial year 2020/2021 that applies to the income earned from industrial and commercial activities, non-commercial professions, and real-estate revenues, which is in line with President Abdel Fattah al-Sisi’s directives to achieve tax justice progressively and upgrade income tax quintiles to uplift the living standards of citizens.

According to the new system, income tax on individuals will be a fair bottom-up tax and will generate tax savings for the lowest, medium and upper medium income quintiles.

It also fixes the current system’s flaws, and it includes an increase of the tax exemption limit to 60 percent, as the basic exemption limit for every taxpayer has been increased from 8,000 pounds to 15,000 pounds and the personal exemption on salaries limit has been raised from 7,000 pounds to 9,000 pounds.

Accordingly, employees who earn up to 24,000 pounds annually are exempted from income taxes. According to the new system, a new quintile has been allocated for those whose net annual income ranges between 15,000 pounds and 30,000 pounds with a 2.5 percent income tax.

Meanwhile, income taxes on individuals whose annual income ranges between 30,000 pounds and 45,000 pounds will be 10 percent instead of 15 percent, and those whose annual income is from 45,000 pounds to 60,000 pounds will be subjected to 15 percent income tax instead of 20 percent, according to Maait.

Moreover, income tax on individuals whose income ranges between 60,000 pounds and 200,000 pounds will be 20 percent instead of 22.5 percent. Maait also added that a new 25 percent tax quintile has been put in place for higher incomes.