New tax relief package expected in Egypt next month

Reuters/Amr Abdallah Dalsh

• Aim to increase transparency
• Tax refund process to be simplified
• More authority for tax officers

Egypt will announce a tax relief package for taxpayers and businesses next month, to increase the transparency of the tax system and encourage more foreign direct investment, it has been reported.

The finance minister is overseeing the package’s implementation to ensure it meets business needs, the Egypt Today newspaper reported, citing Rasha Abdel Aal, head of the Egyptian Tax Authority.

She told the newspaper the package aims to improve transparency and remove bureaucratic hurdles.

The package will introduce sample-based audits at all tax offices, focusing on high-risk cases, according to the report. This will improve compliance and reduce unnecessary audits.

The tax refund process will also be simplified, which is expected to quadruple refund cases.

Tax officers will be given more authority to handle refunds, clear guidelines will be issued to officers and taxpayers will be made aware of the necessary documentation in advance, the paper reported.

• Egypt ends tax privileges for state enterprises
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In September 2024 the country’s finance minister, Ahmed Kouchouk, unveiled a range of measures to make the Egyptian tax system more transparent and attract further investors to the country.

Among the reforms the minister announced was establishing a new body to provide detailed information on tax obligations to local and foreign investors before they make any new investments.

The cabinet approved regulations to eliminate various tax and fee exemptions for state-owned enterprises in February 2024, aligning with a condition set by the International Monetary Fund.

As part of a $3 billion financial support agreement signed in December 2022, the IMF urged Egypt to level the playing field between the private and public sectors.

Foreign direct investments from Arab countries in Egypt totalled nearly $40 billion in the final quarter of the fiscal year 2023-24. The UAE accounted for 95 percent of this, investing $37.5 billion.