Kouchouk explained that the details of the second package
will be presented for public consultation, allowing all opinions and
suggestions to contribute to its development and improvement. He emphasized
that the package is designed to meet investor demands and enhance partnership
and support for all taxpayers, aiming to expand the tax base.
He added that the government succeeded with partners in
implementing the first package of tax incentives. He noted that the simplified
and integrated tax system continues to cover activities with annual revenues
not exceeding EGP 20 million. He said that coordination is ongoing with the
Small, Medium, and Micro Enterprises Development Agency to encourage the first
100,000 taxpayers to join the simplified system. He also highlighted
collaboration with the Ministry of Communications and Information Technology to
support entrepreneurs in joining the tax base and expanding their businesses.
The Minister explained that the second package of tax
incentives targets committed and regular taxpayers with numerous benefits.
These include the creation of a “white list” and a “distinction card,” priority
access to specialized services, and additional incentives. He noted that the
Value-Added Tax (VAT) refund departments will be restructured to simplify and
accelerate procedures, providing liquidity for taxpayers. VAT refunds for
white-listed taxpayers will be processed within one week, with the number of
cases and refund amounts expected to double.
Kouchouk reported that the total VAT refunded during the
fiscal year 2024–2025 reached EGP 7.2 billion, a 151 percent increase. He
stated that the government aims to raise this figure further to provide the
necessary liquidity for taxpayers.
He noted plans to renew the law on resolving tax disputes
and to improve the internal committees handling such disputes, ensuring faster
resolution. He added that there will be a legislative amendment to exempt
dividend distributions for Egyptian subsidiaries of resident holding companies.
Kouchouk confirmed that specialized tax service centers will
be established for taxpayers through the e-Tax company, starting in New Cairo,
Sheikh Zayed, and New Alamein. He said this will represent a qualitative shift
in facilitating the tax system and improving services. A new law will allow
taxpayers to benefit from both the 2023 and 2024 tax periods under the
“lump-sum” and “percentage-based” tax regimes.
The Minister said that capital gains tax will be replaced
with stamp duty to encourage institutional investment in the Egyptian Stock
Exchange. In coordination with the Financial Regulatory Authority, additional
tax incentives will be provided to companies listed on the stock exchange for
three years, aiming to increase trading volume and investment.
He added that an online platform will be launched to consult
with the tax community, promoting trust and partnership. An electronic system
will also be introduced to finalize all company liquidation and closure cases
promptly. He explained that commercial audits will be separated from transfer
pricing audits, and a new stage for reviewing taxpayer appeals will be
implemented.
The Minister noted that a mobile application for real estate
transactions will allow easy notification and tax payment. A 2.5 percent tax
will be applied on unit sales, even if multiple transactions occur. Taxpayers
can recover credit balances from tax returns to maintain liquidity, and
set-offs between debit and credit balances will be allowed to ease tax
payments.
He emphasized the issuance of a guide on the tax treatment
of exported services to support these activities in international markets. He
added that a legislative amendment will allow the issuance of temporary tax
cards valid for four months to expedite company registration procedures.
Kouchouk explained that the package includes measures to
ensure tax fairness and integrate the informal economy. This includes facilitating
all tax procedures for compliant taxpayers, such as audits, VAT refunds, and
approval of costs and expenses. He added that interest on foreign loans for
private sector companies contributing to strategic projects will be deductible
from the tax base, and these companies will be exempt from the maximum limit on
interest deduction, facilitating financing without additional burdens.
He added that a legislative amendment will exempt transit
goods and services from VAT to encourage transit trade. He also mentioned a new
law reducing VAT on medical devices from 14 percent to 5 percent, exempting
inputs for dialysis machines and kidney filters from VAT, and extending the
suspension period for VAT on machinery, equipment, and medical devices to four
years to enhance investment.