Major tax reforms to take effect in March, with minister of finance's close oversight: ETA head

Cairo – February 19, 2025: Rasha Abdel Aal, head of the Egyptian Tax Authority (ETA), confirmed that the long-awaited tax relief package, aimed at benefiting both taxpayers and businesses, will be rolled out in March.

She emphasized that the Minister of Finance is closely overseeing the implementation process to ensure the package effectively meets the needs and expectations of Egypt's business community.

Speaking at the annual tax conference hosted by PricewaterhouseCoopers (PwC) Middle East in Egypt, Abdel Aal highlighted the significance of these upcoming reforms. She described them as a pivotal shift in Egypt’s tax policy and a turning point in the relationship between the Tax Authority and the business sector.

The overarching goal of the new tax relief package is to enhance transparency, eliminate bureaucratic obstacles, and establish a genuine partnership between the state, investors, and taxpayers.

A key component of the first phase of the tax relief package is the introduction of sample-based audits across all tax offices. These audits will be targeted based on the risk profile of individual taxpayers, with a focus on high-risk cases.

The move is designed to improve tax compliance while reducing unnecessary audits. To streamline the process, the ETA will publish a list of required audit documents on its website in advance, as well as include these details in an upcoming investor guide. This will help standardize procedures and minimize disputes.

In addition, the Tax Authority is developing standardized audit guidelines that will unify the tax examination process across the country. Seven guidelines have already been completed, with more in progress. The aim is to ensure consistency in audit methodology, and tax officers' performance will be evaluated based on their adherence to these standards.

Abdel Aal also revealed that efforts are underway to expand the pool of qualified professionals in the Transfer Pricing Unit. The focus will be on selecting and training top talent to manage the growing demands of this important area.

To further enhance transparency and reduce disputes, a high-level committee of senior tax experts will be established to resolve any disagreements that arise during audits in the Transfer Pricing Unit. This committee will introduce a two-tier review process: initial review within the unit and escalation to the committee if necessary.

Another significant improvement highlighted by Abdel Aal is the simplification of the tax refund process. The tax relief package aims to quadruple the number of refund cases processed by tax offices. This will be achieved by empowering tax office employees to handle refunds more efficiently, issuing clear guidelines for tax officers, and ensuring taxpayers have access to all required documentation in advance.

The success of these reforms, Abdel Aal emphasized, will rely heavily on cooperation between the business community and the Tax Authority. The ETA cannot implement these changes alone; a genuine partnership with businesses is crucial to ensuring the success of the reforms and to achieve the intended benefits for the Egyptian economy. Each successful step taken will lay the foundation for future tax relief measures.

The reforms are expected to create a positive impact on Egypt’s business environment, fostering investor confidence and stimulating economic growth. The government is committed to addressing challenges, ensuring that the tax system is fair, transparent, and capable of rebuilding trust with the business community.