Cairo's headquarters of the Egyptian ministry of finance (Photo: Al-Ahram)
Egypt's finance ministry said in a statement on Saturday that the new income tax draft law tackles the current system’s tax flaws, adding that taxes on incomes will be fair and progressive.
The ministry noted that the new draft law will generate savings for low, medium, and upper-medium income classes, with no additional taxes incurred upon transferring from a bracket to another as is the case at present.
“The current law resulted in an increase in the tallied taxes when employees were transferred from one bracket to another, which at times reached double the previous tax amount," according to the statement.
Under the new tax system, employees with annual incomes less than EGP 22,000 will be exempted from paying income taxes, the statement said, adding that employees with higher incomes will be provided with tax exemptions worth EGP 22,000.
According to the current taxing system, income taxes are calculated at 10 percent on incomes between EGP 8,000 and EGP 30,000; 15 percent on incomes between EGP 30,000 and EGP 45,000; and 20 percent on incomes between EGP 45,000 and EGP 200,000.
The current system exempts employees with wages less than EGP 8,000 or more than EGP 200,000 from paying income taxes.
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