Speaking to real estate developers, Kouchouk emphasized that the ministry's focus is on supporting and incentivizing partners through better tax services. He explained that a second package of reforms includes 25 measures aimed at satisfying compliant taxpayers and promoting voluntary tax adherence.
The Minister highlighted that this second package contains "numerous
incentives" for companies across various sectors, including real estate
development. He urged developers to contribute more ideas for simplifying,
standardizing, and digitizing tax transactions, underscoring the real estate
sector's significant economic impact and the government's efforts to boost
property exports.
He noted the importance of forming a joint supreme committee
for the real estate development sector to review and resolve any challenges.
The Minister announced several key reforms:
Real Estate Disposals: A mobile application will be launched
for real estate transactions, allowing for easy notification and payment of the
due tax. The tax rate will remain at 2.5% of the unit's selling value,
regardless of the number of transactions, with no additional administrative
burdens.
VAT Refunds: Institutional changes are underway to ensure a
simple and swift refund of Value Added Tax (VAT) to provide liquidity for
partners.
Investment Incentives: The second package also includes:
Preventing double taxation by exempting profit distributions
for Egyptian subsidiaries of an Egyptian-resident holding company.
Allowing private sector companies involved in strategic
projects to deduct the returns on external loans from the tax base.
Replacing capital gains tax with a stamp tax to incentivize
investment and trading on the Egyptian Stock Exchange (EGX).
Offering tax benefits for three years to encourage major
companies to list on the EGX.
Voluntary Compliance and Medical Devices:
Incentives for the voluntary closure of tax files for the
years 2023 and 2024 using a lump-sum or proportional tax system.
Reducing the VAT on medical devices from 14% to just 5%.
Kouchouk reassured real estate developers that a package of property tax facilities is being approved to alleviate burdens on citizens. Expected measures include: allowing the cancellation of property tax during crises, raising the private residence exemption limit to 4 million Egyptian pounds ($129,000), enabling electronic payment of property tax, waiving late payment penalties in specific cases, with a cap that does not exceed the original tax amount, and reforming and simplifying the appeal mechanism.
Ahmed Abou Raya, Chairman and Managing Director of Black Diamond, praised the Minister's policies, noting that his dialogue with developers reflects a deep belief in the importance of partnership and easing burdens on the tax community.