File Photo: Minister of Finance Mohamed Maait.
Maait said in line with presidential directives to take all supportive measures for low- and middle-income earners to mitigate the inflationary effects linked to external and internal economic challenges, the new income tax bill aims to ease the tax burden on low- and middle-income workers in both the public and private sectors, according to a statement issued by the Ministry of Finance.
“This will be achieved by restructuring the salary tax brackets to ensure social justice and considering regular reviews to increase the 'zero-tax bracket' under inflation rates,” he stated, adding that the new bill does not include any increase in income tax rates, including the "upper bracket."
The new bill aims to define taxable incomes more clearly, simplifying and deepening tax certainty.
Moreover, Maait said there is a commitment to social dialogue and consensus on the bill or any tax amendments before they are referred to the cabinet and the House of Representatives.
He explained that there had previously been an agreement with business representatives on the necessity of drafting a new income tax law that reflects global best practices and aligns with international changes.
The new law aims to address the practical challenges faced while implementing the current law, which has undergone many amendments over the past 20 years, and aligns with efforts to digitize tax systems to achieve fairness and avoid unrealistic assessments, he noted.
The minister also stated that the unified payroll tax system, which depends on a unified platform that electronically calculates taxes on salaries and wages across all sectors without human intervention, has started to bear fruit for the citizens.
He highlighted that the data and results provided by this advanced electronic system were the main drivers for raising the tax exemption limit.
The tax exemption limit for all state workers, including the private sector, has been raised by 73 percent, from EGP 13,500 in July 2018 to EGP 60,000 in the latest social protection package of March 2024.
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