Egypt’s Ministry of Finance potentially working on new tax policy, media

Cairo – October 24, 2023: Egypt’s Finance Ministry is reportedly working on a new five-year tax policy as part of its efforts to encourage new investors and investments, with an unnamed ministry official speaking to a local news site.

The first draft of the new policy has been completed, the source revealed, and will likely be finalized and ready for public viewing as early as next month. The new policy is intended to promote investment and investor confidence.

According to the source, the reform plan is currently in legal review and will be made available to the local community for feedback.

The news site revealed that the policy would include a set 5 percent wage tax and 10 percent tax rates on commercial profits within some economic zones, which would replace the current 22.5 percent corporate income tax rate.

Moreover, some companies and investors will be able to claim tax deductions on new projects of between 30-50 percent depending on the scale and size of their investment.

The Ministry of Finance has accelerated the implementation of several financial and tax reforms over the past few months as part of its efforts to integrate the informal and formal economies, combat tax evasion, modernize the tax system, and bolster tax revenues.

Earlier this week, Minister of Finance Mohamed Maait shared that Egypt’s tax revenues climbed by 27.5 percent due to the ministry’s efforts, adding that the ministry has implemented legislative amendments to remove tax and customs exemptions on economic and investment activities for state-owned entities and companies.

This is intended to encourage fair competition within the local market as Egypt works to further empower the private sector.

“Tax reforms constitute an essential factor in achieving tax justice, on the one hand, and the diversification of sources of revenue, on the other. I think Egypt has untapped space to increase budget revenues by abolishing tax exemptions, which can help to achieve social justice,” explained the IMF’s director of the Middle East and Central Asia, Jihad Azour, explained in an interview released last week.