Egypt is steadily progressing toward maintaining tax stability by building a balanced, supportive tax system that strongly backs the business community and promotes economic growth, stated Rasha Abdel Aal, Head of the Egyptian Tax Authority (ETA)
Rasha Abdel Aal, Head of the Egyptian Tax Authority (ETA), recently discussed the set of proposed tax reforms designed to enhance the tax system in Egypt, emphasizing that these reforms, comprising 20 key changes, were developed following comprehensive discussions with various stakeholders in the business community, including representatives from the Federation of Industries, the Chamber of Commerce, and major accounting firms.
Egypt is steadily progressing toward maintaining tax stability by building a balanced, supportive tax system that strongly backs the business community and promotes economic growth, she stated during a press briefing to explain the first package of tax reliefs announced by Finance Minister Ahmed Kouchouk.
Abdel Aal clarified that the suggested reforms are part of a strategic plan aimed at ensuring the sustainability of Egypt's tax system while adhering to international best practices that prioritize taxpayer satisfaction.
The reforms are intended to create a fair and stable tax environment that eliminates barriers for taxpayers, treating them as partners in the process.
Key objectives of these proposals include reducing the tax burden on businesses, attracting new taxpayers, enhancing liquidity, and standardizing tax services.
The reforms also seek to resolve long-standing disputes and create an integrated system for businesses with annual revenues not exceeding EGP 15 million, offering incentives and exemptions to encourage compliance.
Among proposed changes are exemptions from several taxes, including stamp duty, registration fees, capital gains tax from asset sales, and dividend distribution tax.
The plan also aims to limit the frequency of VAT returns to four times a year, while payroll tax returns would require annual settlement. Additionally, businesses registering with the authority would not be liable for any tax dues from previous periods.
Abdel Aal highlighted the proposed activation of a centralized clearing system to help taxpayers manage their financial obligations and maintain liquidity.
Plans are being explored to expand this system to include other administrative bodies, with a cap on late payment penalties set at a maximum of 100% of the original tax amount.
Taxpayers who missed filing their returns between 2020 and 2023 will have a specified period to rectify their status without facing legal penalties, while the tax dispute resolution law is also proposed for extension, allowing for more compliance opportunities.
The suggested reforms aim to enhance the VAT refund system, increasing efficiency and processing speed. The threshold for submitting transfer pricing documentation has been raised from EGP 15 million to EGP 30 million annually, easing compliance for a broader range of businesses.
