Egypt Deliberates Raising ‘Zero-Tax Bracket’ In New Income Tax Bill. As part of the new income tax bill, Egypt is deliberating frequent reviews to increase the “zero-tax bracket” following inflation rates.
The Minister of Finance in Egypt, Mohamed Maait recently made this revelation, stating that the bill’s goal is to reduce the tax burden on low- and middle-income workers in both the public and private sectors.
This will be done by reorganizing the salary tax brackets to ensure social justice and considering frequent reviews to increase the ‘zero-tax bracket’ under inflation rates.
Egypt Deliberates Raising ‘Zero-Tax Bracket’ In New Income Tax Bill: More Into The Bill
The Minister of Finance continued that in the new tax bill, there is no increase in income tax rates, including the “upper bracket.”
There are plans to take all supportive measures for low- and middle-income earners to reduce the inflationary effects linked to external and internal economic challenges.
According to Maait, an agreement had been previously struck with business representatives on the importance of drafting a new income tax law that indicates global best practices and aligns with international changes.
He explained that the new law will deal with the practical challenges being experienced while applying the present law, which has experienced numerous reforms over the past 20 years and aligns with efforts being made to digitize tax systems to ensure fairness and avoid impracticable assessments.
He mentioned that the unified payroll tax system, which hinges on a unified platform that electronically calculates taxes on salaries and wages across all sectors has begun to yield positive results for the citizens.
Maait continued that the information and results obtained from this advanced electronic system were the main motivators for increasing the tax exemption limit.
In the most recent social protection package of March 2024, the tax exemption limit for all state workers, with the inclusion of the private sector, has been increased by 73%, from EGP 13,500 in July 2018 to EGP 60,000.
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