Photo courtesy of Egyptian cabinet.
"We have delivered on every commitment we made, and we are ready to implement the new laws as soon as they are issued," Kouchouk said.
The package introduces a series of tax incentives targeting investment, manufacturing, healthcare, logistics, and capital markets as part of the government's broader efforts to improve Egypt's business climate and support private-sector growth.
Among the key measures, the government will allow the solidarity contribution to be treated as a tax-deductible expense, reducing the tax burden on businesses and individual taxpayers.
To strengthen Egypt's role as a regional logistics hub, the reforms exempt transit goods and related services from value-added tax (VAT). Companies providing non-banking financial services will also be exempt from VAT regardless of their regulatory authority, while financial services offered by the National Postal Authority will receive the same treatment.
The package extends the suspension of VAT on machinery, equipment used in industrial production, and medical devices from two years to four years, a move intended to lower investment costs for manufacturers.
It also cuts the VAT rate on medical devices to five percent from 14 percent and exempts production inputs for dialysis equipment, kidney filters, and implantable and wearable medical devices from the tax, in support of Egypt's healthcare and medical manufacturing sectors.
To improve corporate liquidity, the government will shorten VAT refund periods. Businesses operating under the simplified tax regime will be eligible to receive outstanding VAT credits after three months instead of six, while other businesses will see the refund period reduced to four months from six.
The reforms also seek to deepen Egypt's capital markets by introducing a three-year incentive for companies that list on the Egyptian Exchange (EGX).
In a major shift in taxation of securities, the government will replace the capital gains tax with a stamp duty to encourage trading and investment on the stock exchange. The stamp duty imposed on non-resident investors will also be reduced to 0.5 per mille from 1.25 per mille to align treatment with resident investors.
Kouchouk said investors holding unlisted securities for at least three years will receive an incentive linked to the Central Bank of Egypt's lending and discount rate, which will be added to the acquisition cost of those securities upon disposal.
The package also addresses double taxation on dividend distributions among Egyptian resident companies by ensuring the tax is collected only once at the level of holding and subsidiary companies.
In addition, companies participating in national infrastructure projects will benefit from higher deductible interest expenses on project loans and an exemption from withholding tax on foreign loans and credit facilities, reducing financing costs for strategic investments.
To facilitate business establishment, the government will introduce an eight-month temporary tax card while companies complete licensing procedures. The reforms also simplify the write-off of small debts and reduce administrative requirements for financing companies.
On real estate taxation, Kouchouk said the existing 2.5 percent property transaction tax on individuals will remain unchanged and continue to be calculated on the property's sale value regardless of the number of transactions. Transfers between spouses, parents, children, and direct descendants will remain fully exempt.
The payment deadline for the real estate transaction tax will also be extended to 60 days from 30 days.
The minister added that the government will renew the Tax Dispute Settlement Law, although he did not specify the duration of the extension.
The International Monetary Fund (IMF) reached this week a staff-level agreement with Egypt on the seventh review of its $8 billion Extended Fund Facility (EFF) programme and the second review under the Resilience and Sustainability Facility (RSF), paving the way for about $1.64 billion in new financing, subject to approval by the IMF Executive Board.
Empowering the private sector to play a greater role in the country’s economy and implementing a wide range of tax reforms are key commitments Egypt pledges under the EFF programme.
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