Rasha Abdel Aal, Head of the Egyptian Tax Authority (ETA), reaffirmed the Ministry of Finance and ETA's commitment to strengthening communication with tax professionals, economic associations, and the business community. She emphasized that these entities are key partners in developing the tax system and ensuring tax fairness. Abdel Aal pointed out that, to reassure current and potential investors about their future tax obligations, the authority has introduced a comprehensive guide outlining their rights and responsibilities. Additionally, the Investor Support Unit and the Advance Ruling Unit have been expanded to provide better assistance to new and existing taxpayers. She explained that this initiative aligns with the ministry's strategy to foster open dialogue with taxpayers and experts, aiming to identify challenges, provide practical solutions, and enhance the investment climate. The authority also seeks to deliver more flexible and efficient tax services while promoting tax awareness to encourage voluntary compliance and reduce disputes. This coincides with Parliament's approval of the first package of tax relief measures, marking a new era of credibility, transparency, and fairness while reinforcing trust and partnership with the business sector. Abdel Aal made these remarks during a seminar organized by the Scientific Association for Tax Legislation and the Egyptian Society for Political Economy, Statistics, and Legislation, in collaboration with ETA, to discuss and analyze the newly introduced tax relief measures. She noted that the package includes 20 provisions, some requiring legislative amendments and others needing ministerial or administrative decisions. A key approved measure is a simplified and incentivized tax system for small businesses, micro-enterprises, professionals, and entrepreneurs with annual revenues not exceeding EGP 20m. This system offers new incentives, including exemptions from prior tax liabilities, stamp duty, development fees, and registration charges. Additionally, income tax will be capped at a maximum of 1.5%. A major benefit of this system is that the first tax audit will only take place five years after joining, with a simplified annual income tax return, quarterly VAT filings, and an annual payroll tax return. Participants are also exempt from advance payments, profit distribution tax, and capital gains tax. The tax relief package also focuses on easing burdens on taxpayers by capping all tax penalties, ensuring they do not exceed 100% of the original tax due. This measure aims to eliminate excessive interest and late fees, preventing taxpayers from being penalized for delays in tax audits or prolonged disputes. Law No. 160 of 2024 has also been issued, extending the validity of Law No. 79 of 2016 to efficiently resolve outstanding tax disputes. Abdel Aal added that a simplified mechanism has been introduced to settle pre-2020 tax disputes, particularly for cases assessed on an estimated basis. Taxpayers can now settle by paying a percentage of their declared tax liability or their last assessed tax amount without undergoing traditional audits. Those with proper financial records who have already been audited for pre-2020 tax periods can also request a settlement without incurring late fees or additional taxes, provided they pay the original tax due within three months. One key provision allows taxpayers who missed their tax filing deadlines between 2020 and 2024 to submit their returns within a specified period without facing legal penalties. Additionally, taxpayers can file amended returns for these years if they need to correct omissions or errors, again without penalties. Abdel Aal highlighted that the scope of sample-based tax audits has been expanded to cover all taxpayers across tax centers, zones, and offices, starting with 2023 tax returns. To streamline the process, required audit documents will be announced in advance on the authority's website, with only minimal additional documentation requested if necessary. El-Sayed Saqr, Deputy Head of the Egyptian Tax Authority, emphasized the importance of implementing clear monitoring mechanisms to ensure the proper application of the relief package. He stated that multiple channels will be available for taxpayers to escalate their concerns, from reaching out to local tax office heads to directly contacting the authority's leadership. He also announced the formation of a high-level committee to oversee the implementation of the tax relief measures, supported by a 24/7 operations room. This team will handle execution issues, resolve challenges quickly, and ensure that no obstacles hinder the ministry's efforts to establish a transparent and fair tax environment. Rabah Rateb, Chairperson of the Scientific Association for Tax Legislation, praised the tax relief measures, highlighting their positive impact on Egypt's economy. He commended the Ministry of Finance and the Tax Authority for their flexibility in addressing the challenges faced by the tax community. He also noted that Egypt's tax administration serves as a model for the Arab region. Erfan Fawzy, Secretary-General of the Scientific Association for Tax Legislation, reaffirmed the association's commitment to ongoing collaboration with the Tax Authority to promote tax awareness and ensure a fair and efficient tax system. He emphasized the importance of understanding taxpayer challenges and working together to find effective solutions. Mohamed Younis, President of the Egyptian Society for Political Economy, stated that the recently approved tax relief measures will attract more investment, boost GDP, and support Egypt's economic goals.
