Small business accounting will be streamlined under new proposals (Photo: Reuters)
Tax regulations will be simplified for small enterprises in Egypt to help streamline their operations, the country's finance ministry said in a statement on Thursday.
Under the new system, Egypt-based businesses with annual turnover of less than LE1 million ($166,600), will not have to declare all their financial transactions to tax authorities.
Egypt applies a flat corporate income tax of 20 per cent on net profits under LE10 million. Profits exceeding this are taxed at 25 per cent.
The changes follow proposals by Egyptian chambers of commerce and business associations that taxation for small enterprises be simplified, the ministry's statement said.
In the past, small businesses have found it difficult to provide documents for all income and expenses, making it difficult to calculate their net profits for tax purposes.
This has led to frequent disputes between small business-owners and the tax authority, with the latter unable to reach out-of-court settlements to their problems, Ahmed Refaat, head of Egypt’s tax authority was quoted as saying in the statement.
Enterprises with annual turnover in excess of LE1 million will still be required to keep full financial records, the statement said.