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Egypt's parliament approves increase in annual income tax exemption

Parliament approved amendments to the Income Tax Law no.91/2005 to raise annual income tax exemption to EGP 36,000 up from EGP 24,000.
30.05.23 | Source: Ahram Online

The bill also stipulates that individuals whose annual income exceeds EGP 1.2 million are to pay a higher income tax rate of 27.5 percent instead of the previous rate of 25 percent.


"This bill aims to achieve social justice by raising the annual income tax exemption threshold to EGP 36,000. It also aims to impose a higher income tax rate on high-income individuals," said the draft bill.


Finance Minister Mohamed Maait indicated that although the new exemption will cost the state treasury an amount of EGP 10 billion, the income tax imposed on people earning more than EGP 1.2 million a year will generate around EGP 4 billion. 


"As a result, the net cost of these tax exemptions will stand at EGP 6 billion," said Maait, vowing there would be more income tax exemptions in the coming fiscal year to help support low and average-income groups.


In addition, the bill includes incentives and rewards for taxpayers. Individuals using the new e-invoicing system will receive a 5 percent incentive; whereas those reporting tax evasion crimes will be rewarded with 10 percent of the recovered amount.


Maait said the bill also introduces a simplified tax system for small and micro-scale enterprises whose value of transactions does not exceed EGP 10 million per year.


Furthermore, parliament approved amendments to law 182/2020, granting exemptions on returns from investment in treasury bills, bonds, and capital profits.

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