Egypt set to approve lower tax ceiling for firms
EGYPT’S government was expected to approve yesterday a lower tax ceiling for companies and individuals in high-income brackets in order to attract investors and boost the economy, the investment minister said.
The step comes days before Egypt holds an investment conference in the Red Sea resort of Sharm el-Sheikh it hopes will attract billions of dollars and speed up an economic recovery after four years of turmoil.
Under the planned tax reform, the ceiling on firms and individuals earning more than 1 million Egyptian pounds (R1.6m) a year will be cut from 25 percent to 22.5 percent for a period of 10 years.
Tax regime
“The cabinet will agree today (yesterday) in a meeting on unified taxes,” Investment Minister Ashraf Salman said. “The new changes will encourage investment and lead to justice in the tax system for all.”
The minister said that a temporary 5 percent tax on wealthy individuals earning over 1 million Egyptian pounds a year will be cancelled as part of the new tax regime. When applied in 2014, the temporary tax was supposed to last for three years.
Fuel subsidies
The new tax regime would be finalised in about three weeks and was expected to be implemented in the 2015/16 fiscal year starting in July, Salman said.
President Abdel Fattah al-Sisi has cut fuel subsidies and enacted other reforms, win- ning praise from foreign investors and the International Monetary Fund.
He has also announced mega projects such as a second Suez Canal and road works designed to create jobs and stimulate economic activity in the most populous Arab country.
The government hopes that the new tax structure will boost an economy battered by political upheaval and militant violence since an uprising toppled autocrat Hosni Mubarak in 2011.