Rasha Abdel Aal, head of the Egyptian Tax Authority (ETA), has confirmed that the Minister of Finance is closely monitoring the implementation mechanisms of the new tax relief package, designed to meet the aspirations of taxpayers and businesses. She announced that the package is scheduled to take effect in March. Abdel Aal emphasized that these reforms mark a significant shift in tax policy and the relationship between the Tax Authority and the business community. The goal is to enhance transparency, eliminate obstacles, and foster a genuine partnership between the state, investors, and taxpayers. Speaking at the annual tax conference hosted by PricewaterhouseCoopers (PwC) Middle East in Egypt, she described the upcoming phase as a turning point in Egypt's tax system. The reforms will have a profound impact on the business environment and investors, with the government fully committed to addressing challenges and rebuilding trust through fair and transparent tax policies. She explained that a key measure in the first phase of the tax relief package is the adoption of sample-based audits across all tax offices. These will be conducted based on a taxpayer risk profile, ensuring that only high-risk cases are selected for review to improve tax compliance. To streamline the process, the required audit documents will be announced in advance on ETA's website and included in a soon-to-be-released investor guide, helping standardize procedures and minimize disputes. Abdel Aal also revealed that standardized audit guidelines are being developed to unify tax examination procedures across all regions and tax offices nationwide. These guidelines will ensure consistency in audit methodology, with tax officers' performance evaluated based on their adherence to them. So far, seven guides have been completed, with more in progress. Additionally, efforts are underway to expand the number of qualified professionals in the Transfer Pricing Unit, focusing on selecting and training top talent to handle the growing workload. To further enhance transparency and reduce disputes, a high-level committee of senior tax experts will be formed to resolve audit-related disagreements within the Transfer Pricing Unit. This system introduces a two-tier review process: initial examination within the unit, followed by escalation to the high-level committee if objections arise. Abdel Aal noted significant improvements in tax refund processes, with the tax relief package aiming to quadruple the number of refund cases. This will be achieved by simplifying procedures at tax offices, empowering employees to process refunds more efficiently, issuing clear instructions to tax officers, and ensuring taxpayers have access to all required documentation in advance. She underscored the importance of cooperation between the business community and the Tax Authority, stressing that the success of these reforms depends on mutual commitment. The authority cannot implement these changes alone—it requires a genuine partnership with businesses to achieve the intended benefits. Each successful step in this process will pave the way for further tax relief measures in the future. Sherif Shawky, lead partner for tax services at PwC Egypt and Kuwait, highlighted the significant advancements in Egypt's tax system, including the introduction of the new tax relief package and the rapid digital transformation of tax processes. These changes align with international tax regulations, particularly the "Pillar Two" framework, which ensures fair and organized tax compliance for multinational companies and related entities. Shawky also pointed out key updates to corporate income tax and VAT regulations, designed to enhance compliance, reduce disputes, and promote tax fairness. He emphasized that the new international tax framework provides a clear structure for companies to meet global tax obligations, creating a more stable and transparent business environment. Additionally, he stressed that digital transformation and reliance on advanced information systems are crucial in simplifying tax compliance. Automated systems facilitate accurate and timely tax filing, minimize errors, and improve communication with the Tax Authority. Companies that invest in upgrading their accounting and tax systems will find it easier to comply with the new regulations and fully benefit from the tax relief package. Shawky concluded by stating that the tax relief package is a major milestone for Egypt's tax system, offering benefits to investors and taxpayers. These measures will contribute to a more attractive business environment. However, their success depends on clear and stable tax policies that take future economic and legislative developments into account. He emphasized that integrating tax relief measures with digital transformation and international regulations will create a more efficient and transparent tax system. Striking a balance between facilitating tax compliance and ensuring fairness will strengthen investor confidence and make Egypt a more stable and appealing destination for investment.
