As Egypt grapples with economic challenges, the government has introduced a new tax incentive package designed to encourage growth and enhance the business environment.

On Wednesday, Finance Minister Ahmed Kouchouk and Prime Minister Mostafa Madbouly unveiled the new incentives. This package aims to boost economic activity by simplifying tax processes and providing business incentives.

It specifically targets small and micro enterprises, startups, freelancers, and professionals with annual turnovers under EGP 15 million, offering them a streamlined and integrated tax system. 

“The government aims to broaden the tax base to ensure the interests of both the state and investors while also improving services for citizens,” Kouchouk stated.

To encourage informal businesses to formalize, the government will permit the submission or amendment of tax returns for 2021 to 2023 without penalties. Additional measures include simplifying tax returns, expanding sample audits, and adopting a risk-based audit approach.

Late payment penalties will now be capped at the original tax amount, and efforts will be made to speed up tax dispute resolutions. The threshold for international companies required to submit transfer pricing studies has been increased to EGP 30 million.

Further reforms include a streamlined VAT refund process, a centralized investor settlement mechanism, and tiered penalties for non-compliance based on business size. The government will also strengthen the Egyptian Tax Authority through enhanced employee training and a new performance evaluation system.

Prime Minister Madbouly addressed rising inflation, attributing it to fuel price hikes, and reaffirmed the government’s goal to reduce inflation to under 10% by the end of 2025, in alignment with the Central Bank of Egypt’s plan.

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