In recent times, Egypt’s tax administration has put in place measures to incentify tax payments and grow the current level of compliance.
Egypt-tax law presents you current Income Tax Rate of 25 percent, and active double taxation treaties with a large number of countries. These changes continue to prove Egypt’s revenue generation capacity regardless of the recent global economic instability and disruption posed by the Covid-19 pandemic.
The recent Russian-Ukrainian crisis has also brought about its shades of disruption within supply chains, increased shipping costs, and high inflation rates.
All the above and more have made African countries including Egypt ensure that the necessary framework and reforms are in place to grow internal revenue through taxation.
The 4 Recent Changes in Egypt’s Tax Law
This article takes you through recent changes introduced in Egypt’s tax law to incentify taxpayers to remit taxes to the government’s coffers.
These incentives come in tax exemptions while some are adjustments of tax rates to accommodate current realities.
- Amendment of Provisions within the Value Added Tax Law
This connotes one of the unprecedented developments in the tax system through the introduction of Law No. 3 of 2022 to amend provisions of the Value Added Tax Law No. 67 of 2016.
This amendment exempted from VAT goods or services exported by projects in regions, cities, free markets and economic zones of a special nature outside the country.
The same exemption is also extended to the following except for passenger transport; goods or services imported by projects carrying out licensed activities within regions, cities, duty-free markets, and economic zones of a special nature.
- E-Commerce Inclusion
Through the application of a simplified registration and collection system, e-commerce transactions are now subject to tax. This simplified system of revenue collection now replaces appointing a legal representative.
Ensuring digital compliance, the recent changes now include the application of an electronic invoicing and receipt system to allow consistent monitoring of business transactions between financiers and consumers by exchanging all invoice data in a digital format.
- Increment of Category for Tax Refund
Recently too, categories for tax refunds have been increased to incorporated goods and services subject to scheduled tax or taxes exempt abroad, taxes that were previously paid or charged on exported goods and services, regardless of whether they were issued in their original condition or altered/incorporated into other goods or services (as long as they do not exceed the credit balance of the goods and services for which the tax deduction is applicable).
In addition to the tax refund, the following will now be registered under the simplified supplier registration system to carry out its activity within the country:
- Credit balances that have passed more than six consecutive tax periods.
- Tax previously paid on buses and passenger cars designated for the licensed activity of the facility, and
- Tax incurred by a non-resident registered under the simplified supplier registration system to carry out its activity within the country.
- New Tax Facilities for Financiers and Taxpayers
We cannot conclude this list and not mention a recent draft law that seeks to introduce new tax facilities for financiers and taxpayers to strengthen current economic realities in Egypt and incentify production.
In specifics, this draft accommodates delayed and additional taxes to be bypassed, provided that all taxes due are paid no later than next June 30th.
However, the new draft provides an exemption to include income taxes, stamp duty, and the development fee of the state’s financial resources.
