This initiative, spearheaded by tax accountant Ashraf Abdel Ghani, the association's founder, reflects a commitment to social responsibility and acknowledges the crucial role of small and medium-sized enterprises (SMEs) in the Egyptian economy. SMEs are recognized as the backbone of economic and social development, contributing approximately 80% to the GDP, accounting for 90% of capital formation, and employing around 5.8 million people. The free consultations are designed to assist these startups in aligning their tax status with the new regulations.
Abdel Ghani stated that SMEs help combat unemployment, boost
GDP growth, increase exports, improve competitiveness, meet the needs of local
markets, and reduce the import bill.
He further explained that Egypt's Vision 2030 prioritizes
SMEs, and the new laws reflect this by offering substantial tax incentives. A
key provision is that businesses joining the formal tax system will not be held
liable for any previous years' tax obligations, effectively providing a clean
slate.
The new tax facilitations include exemptions from stamp
duty, registration and notarization fees, capital gains tax, and dividend tax,
in addition to exemption from the withholding and advance payment system.
He also noted further facilitations, including quarterly VAT
returns, a single annual payroll tax return, and an initial tax audit after
five years.
To simplify tax procedures, Abdel Ghani announced the establishment of a tiered tax accounting system. The system applies the following rates: 0.4% for businesses with annual volumes of 500,000 EGP or less, 0.5% for volumes between 500,000 and 2 million EGP, 0.75% for 2 to 3 million EGP, 1% for 3 to 10 million EGP, and 1.5% for volumes reaching up to 20 million EGP.