Egypt's cabinet approved expanding the first income bracket exempted from taxes, to start taxing from an annual income of LE6,500, up from LE5,000, state-run news agency MENA reported.

The ministerial economic committee proposed in March — though not yet approved by the cabinet — to cut the income tax ceiling to 22.5 percent for individuals and corporations earning more than LE250,000 annually, from 25 percent, in the hope of encouraging investment, days before the Egyptian Economic Development Conference was held in Sharm El-Sheikh.

The committee also approved cancelling a five percent wealth tax for those earning more than one million Egyptian pounds.

The second bracket, which includes those earning annually between LE6,500 and LE30,000, pays 10 percent; the third bracket, from LE30,000 to LE45,000, pays 15 percent; the fourth bracket, including earners who make between LE45,000 and LE250,000, pays 20 percent.

As part of Egypt's five-year fiscal reform programme, the government has cut subsidies and introduced new taxes, including the property tax, to reduce the country's ballooning deficit.

However, the government has not yet raised fuel prices this year as Egypt, a net importer, seeks to benefit from an oversupply in global markets that lead to a plunge in oil prices.

Egypt's deficit is projected at 8.9 percent of GDP in the fiscal year 2015/16, narrowing from an estimated deficit of 10.8 percent in the previous fiscal year.