Rasha Abdel Aal, Head of the Egyptian Tax Authority (ETA), announced that the ETA is working diligently to finalize the second package of tax facilitations, in line with directives from the Minister of Finance. The preliminary framework for the package was recently presented during a meeting with the Prime Minister, and specialized working groups are currently refining the details. Prior to implementation, ETA will open a community dialogue to collect feedback and proposals from the business community. "The second package will introduce a fully integrated VAT refund scheme alongside a range of tax measures aimed at addressing the challenges faced by taxpayers and reinforcing business community confidence in the tax system," Abdel Aal explained during a meeting with the Egyptian Businessmen's Association. Abdel Aal highlighted the success of the first package of tax facilitations, noting that collaboration between ETA and the business community played a crucial role in overcoming initial challenges. "While there were some hurdles, as is expected during any major transformation, we are committed to addressing these challenges and ensuring smoother implementation moving forward," she said. The ETA chief reaffirmed the Ministry of Finance's commitment to supporting small and medium-sized enterprises (SMEs), particularly those with a turnover not exceeding EGP 20m. These businesses are essential to Egypt's economy and their ability to scale and access global markets is a priority for the Ministry. As part of the first tax facilitation package, Law No. 6 of 2025 was introduced to support young entrepreneurs and SMEs. Rather than focusing on maximizing tax revenue, the law aims to provide stability and support to businesses by introducing a graduated tax rate based on business size, rather than a flat tax rate. This ensures fairness and equal opportunities for growth. The simplified tax system provides businesses with several advantages. Businesses that join the system are fully exempt from tax audits for five years. They are also exempt from capital gains tax on the sale of fixed assets, as well as from dividend tax, state development fees, stamp duties, and registration fees. Additionally, businesses will be exempt from advance payments under the tax account system. They will also benefit from the ability to submit VAT returns quarterly, rather than monthly, and payroll tax returns annually. These benefits aim to reduce the administrative burden on businesses and simplify the tax process, allowing businesses to focus more on growth and less on complex compliance. However, these advantages are conditional on businesses submitting tax returns on time and adhering to the mandatory e-invoice and e-receipt systems. To assist SMEs with these transitions, ETA provides free training, point-of-sale (POS) devices, and technical support to ensure the smooth adoption of digital tax systems. Abdel Aal also clarified that there are no plans to introduce new laws for waiving late payment penalties. Under the current framework, penalties are capped at 100% of the original tax. She also noted that significant progress has been made in resolving past disputes with taxpayers, signaling a new era of trust and cooperation. "We have turned a new page in building trust and cooperation with the business community," she said. Turning to the e-commerce sector, Abdel Aal highlighted the significant strides ETA has made through its specialized unit, which has received international training to address the sector's unique challenges. One of the key issues in the e-commerce sector is the absence of physical premises for online businesses, which previously made registration complicated. To address this, a ministerial decision was issued allowing online businesses to register using only a national ID. "We have developed regulations tailored to our society's unique circumstances, enabling us to stay ahead of emerging challenges," she explained. Abdel Aal emphasized that the success of the second package of tax facilitations depends on the continued collaboration between the state, Ministry of Finance, and the business community. "The success of this initiative depends on our collective efforts. The state, the Ministry of Finance, and the ETA cannot succeed without the support of the business community, which benefits both investors and the nation," she concluded. The meeting also provided a platform for members of the Egyptian Businessmen's Association to ask questions and engage in discussions about the second package of tax facilitations, including ETA's efforts to integrate the informal sector and achieve greater tax justice.
