– Egypt’s new tax incentives focus on simplifying tax processes for small enterprises, startups, and freelancers, with measures such as penalty-free tax return submissions for 2021-2023 and capped late payment penalties.

– A centralized settlement system for investors and a tiered penalty structure based on business size will be introduced, alongside a simplified VAT refund process and expanded tax audits.

– To improve the efficiency of the Egyptian Tax Authority, the government plans to invest in employee training and implement a new performance evaluation system, aiming to enhance service quality and productivity.

Egypt’s government has introduced a new package of tax incentives aimed at streamlining tax processes and enhancing economic productivity. The measures, announced by Finance Minister Ahmed Kouchouk, target small and micro enterprises, startups, freelancers, and professionals with an annual turnover of less than EGP 15 million, providing them with a simplified and integrated tax system.

Kouchouk, speaking at a press conference attended by Prime Minister Mostafa Madbouly, stated, “The government aims to broaden the tax base to ensure the interests of both the state and investors, while also improving services for citizens.”

Experts have welcomed the incentives, particularly as the government seeks to formalize businesses operating in the informal economy. Mohamed El-Erian, a noted economist, commented, “This is a critical move for Egypt. By extending such incentives, the government encourages compliance while potentially widening its tax net—a win-win for both the state and the private sector.”

The incentives include allowing businesses to submit or amend tax returns for 2021 to 2023 without incurring penalties, simplifying tax return processes, expanding audits to all tax centers, and implementing a risk-based approach to tax audits. “Providing such flexibility is key to ensuring that smaller businesses are not overwhelmed by bureaucracy,” added business consultant and tax expert Amr El Sawy.

Penalties for late payments will also be capped at the original tax amount, with the government pledging to expedite the resolution of tax disputes. The threshold for international companies required to submit transfer pricing studies has been raised to EGP 30 million.

Economist Rania Al-Mashat noted, “These measures are expected to reduce the tax compliance burden, particularly for startups and small enterprises, allowing them to focus on growth and innovation rather than tax complexities.”

Further measures include the introduction of a centralized settlement mechanism for investors, simplified value-added tax refund processes, and a tiered approach to penalties for non-compliance, based on the size of the business. The Egyptian Tax Authority will also receive investments in employee training and development programs, with a new performance evaluation system to be implemented.

Prime Minister Madbouly also addressed the country’s inflationary concerns during the press conference, citing fuel price hikes as a key factor. “We are committed, according to our plan with the Central Bank of Egypt, to reduce inflation to less than 10% by the end of 2025, and this is what the state and all its institutions are working to achieve,” he stated.