Egypt is making strong efforts to improve its tax system and stimulate investment and economic growth, Kouchouk affirmed during a press conference held Wednesday at the government's headquarters in the New Administrative Capital.
He emphasized the government’s commitment to fostering a more equitable, transparent, and certain relationship with the tax community, laying the foundation for a strong and enduring partnership.
The government has listened carefully to representatives from the tax, industrial, commercial, accounting, professional, and economic communities and will overcome challenges through continuous development, Kouchouk added.
For the first time, the cabinet will introduce a simplified and integrated tax system for small and medium taxpayers earning up to EGP 15 million annually, Kouchouk revealed.
Moreover, the government is focused on encouraging small enterprises, startups, entrepreneurship activities, freelancers, and professionals. It offers new incentives, exemptions, and facilities covering all types of taxes, including income tax, value-added tax (VAT), stamp duty, and state resource development fees.
This includes exemptions from capital gains taxes, profit distributions, stamp duty, and registration fees for those joining this simplified system, along with the exemption from advance payment systems, the minister indicated.
Only four VAT declarations will be required annually, with the first tax audit occurring after five years, Kouchouk stated.
Furthermore, salary and wage declarations will be merged into the annual settlement declaration, and those registering voluntarily will not be pursued for previous tax dues.
The finance minister further highlighted that the central clearing system will allow taxpayers to make electronic settlements with the government between their receivables and debts, enhancing liquidity for partners.
The government will also set a cap for the first time on late payment penalties, ensuring they do not exceed the original tax amount to reduce the burden on partners caused by delayed audits or prolonged dispute resolutions.
Kouchouk clarified that unregistered taxpayers will be encouraged to register without concern for past liabilities.
He also pointed out a new opportunity for taxpayers to regularize their status before audits, promoting voluntary compliance with tax laws.
The government will encourage taxpayers to submit or amend their tax returns for 2020-2023 without facing penalties to rebuild trust.
It will also double the threshold for submitting transfer pricing studies between related parties to EGP 30 million annually.
The ministry aims to expedite VAT refunds and increase the number of beneficiaries fourfold each year to enhance liquidity for projects.
A tax advisory council will be established for the first time to unify tax rulings, produce reference guides on stable principles, and promote tax awareness. Administrative decisions will be reviewed to simplify and standardize tax processes.
Additionally, the government will form a permanent pre-ruling unit to conduct and approve tax research, clarifying future tax implications for taxpayers and investors.
The cabinet will also facilitate the electronic submission of complaints and documents to enhance the Investor Support Unit’s role, following international best practices.
Kouchouk emphasized the importance of leveraging data in electronic systems to simplify tax procedures and declarations and offer the best returns for taxpayers.
He also announced the phased abolition of declarations without supporting documents for legal entities by 2025 and individuals by 2026.
The sample audit system will be expanded to cover all tax offices and centres to ease the burden on taxpayers and build trust, with a portion of taxpayers subject to annual audits based on modern risk systems and the capacity of technical teams to prevent delays.
Required documents will be submitted only once, without repetition across tax types.
Tax audit guidelines and mechanisms will be standardized and published according to business sectors across all tax offices, giving taxpayers sufficient time to prepare the necessary documents.
Finally, the minister noted that independent entities will be established to measure taxpayer satisfaction with tax services, ensuring sustainable development and course corrections.
The Tax Authority’s website will be updated with relevant legislation, instructions, and circulars to ensure easy access to information for all tax community members.
Comprehensive guidebooks will be expanded and explained, covering investors' rights and obligations and the incentives and facilities provided by tax laws.
Kouchouk also revealed that the government will launch a new advanced electronic portal for taxpayer complaints, fully committing to handling them effectively.
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