Egypt seeks to boost tax-to-GDP ratio, intends to avoid adding burden on citizens

Cairo – October 16, 2023: Egypt aims to bolster its tax-to-gross domestic product (GDP) ratio in line with global standards, which will be implemented without adding further burdens to citizens, explained Finance Minister Mohamed Maait during his attendance at the annual meetings of the International Monetary Fund and the World Bank held in Marrakesh, Morocco.

According to the finance minister, Egypt seeks to improve the ratio by expanding automated tax solutions, specifically targeting the integration of the informal economy into the formal economy.

Furthermore, Egypt is refining the tax community to ensure tax justice and to establish a framework for fair competition within the Egyptian market, Maait added.

He underscored that these are within the framework of the government’s efforts to strengthen the government's ability to improve citizens' lives and the services offered to them, to alleviate inflationary pressures, as well as respond to the global economic challenges following the pandemic and the Russia/Ukraine war.

Currently, Egypt is pursuing balanced policies and increasing incentives to reshape the Egyptian economy, shifting towards production and exports, which will enable the government to sustain higher expenditures on critical areas such as health, education, and social protection.

Maait added that the Egyptian government is actively working to stimulate new economic activities that can compete on a global scale.

He expects these activities to enhance the nation's production capabilities, contribute to the growth of public revenues, maintain financial discipline, and navigate Egypt through the current complexities of the global economic landscape.

On Sunday, the Egyptian parliament approved several draft bills including amendments to the Income Tax Act. The changes are aimed at reducing the tax burden on low-income citizens, aligning with the state's commitment to promoting social justice by distributing the tax burden in accordance with various income levels and adapting to economic and social changes and developments.

In the past few years, Egypt has undergone several reforms in the tax system, including the digitization of tax operations.

During a conference earlier this month, Fayez El-Dabaani, the head of the Egyptian Tax Authority, highlighted the significant advantages of digitizing tax operations and optimizing tax revenues, while acknowledging the tremendous effort exerted by the Egyptian government to ensure the success of this initiative.