Minister Kouchouk outlined three main priorities in the short term, with key measures including resolving historical tax disputes, simplifying the tax framework, and implementing business-friendly fiscal policies, with a comprehensive tax facilitation package set to be unveiled.

Tax authority and business community
 

“The first one and the one we have been putting as our top short-term priority is how to reset and restore the relationship between the Egyptian tax authority and the business community,” Kouchouk stated.

He said a lot can be done in the short term, such as introducing methods to deal with historical disputes and the huge amount of files that have been mounting for years without being resolved or disputed.

Moreover, a comprehensive package of tax facilitations will be announced during the cabinet meeting on Wednesday.

Egypt is committed to a strategy that increases the private sector's contribution to the GDP to 65 percent until FY2026/2027, according to the State Ownership Policy Document, which includes modifying the tax system to make it more attractive for investors.

Additionally, Kouchouk suggested adopting a risk management mechanism for all taxpayers, including large ones, stressing the importance of a simple, coherent, and consistent tax framework for small and medium enterprises, startups, freelancers, and small firms.

He also acknowledged that business liquidity is critical and mentioned existing issues within the tax authority that limit proper liquidity for firms, including the VAT refund system and due payment mechanisms.

Kouchouk emphasized that rebuilding trust will encourage broader tax participation and a more extensive tax base, calling for improved incentive schemes and packages that address a wider range of indicators and skills.

In addition, the minister advocated a robust modelling system and open dialogue with taxpayers to drive improvements.

Business-friendly fiscal policies
 

Adopting business-friendly fiscal policies is another key objective.

Kouchouk also highlighted the goal of achieving a competitive high-growth path driven by the private sector and increasing export activities.

Performance metrics will include various indicators to track the economy’s competitiveness and support productive sectors.

He added that this entails having trust in the business community and taxpayers. In return, we expect more involvement and a tax base wider in size and numbers.

Kouchouk highlighted that the main objective is to achieve a competitive high-growth path led by the private sector and with a bigger contribution from export activities.

The minister stated that performance will be measured based on wider metrics that include standard, debt-indicated, and more indicators that can track our ability to enhance the competitiveness of our economy and support productive sectors and export activities.

“We will avail all that is needed in terms of physical resources to make the recently announced car manufacturing initiative work well,” he revealed.

Kouchouk also indicated that car manufacturing is a short-lived initiative that will create enough economies of scale in Egypt to switch to other activities within five years.

Furthermore, he pointed out the initiative supporting investors in the tourism sector to accelerate investments and construct new hotel rooms in strategic locations.

Kouchouk stated that the ministry is designing a new effective mechanism to support its activities, particularly freelancing. 

It is also designing an initiative to enable individuals to switch to energy-saving vehicles, which firms could also follow, he added.

Debt reduction sustainability
 

"We will be very proactive and adopt standard and innovative ideas and measures to ensure the sustainability of our debt and debt service bill,” stated Kouchouk.

According to the minister, new instruments will be introduced into the domestic market such as green instruments and sukuk instruments.

Additionally, he said the entire dollar amount of the Ras El-Hekma deal was saved to build strong net international reserve buffers, adding that part of the EGP equivalent of the deal helped reduce the country's debt.

The finance ministry had committed to allocating the local currency equivalent of $12 billion, out of the Ras El-Hekma deal's $35 billion, for the dept. It aimed to increase the primary balance by 4.6 percent of the GDP and decrease debt by the same amount, according to the IMF assessment from the first and second reviews of Egypt's $8 billion loan deal.

The ministry has also taken steps to diversify Egypt's debt instruments across currencies, markets, and investors.

Kouchouk explained that the external debt or the budget sector debt that the ministry is responsible for decreased in nominal terms by $4 billion, while the debt-to-GDP ratio came down by around four percent of the GDP despite huge changes in the framework and indicators, including the exchange rate and interest rates.

Similarly, Egypt's overall debt declined to 89 percent of the GDP by the end of FY2023/2024.