New Initiative In Egypt Aims To Settle Business Tax Disputes By June 2023

In a decisive move to support small and mid-sized businesses, Rasha Abdel Aal, the head of the Egyptian Tax Authority, has unveiled an ambitious initiative aimed at resolving all tax disputes for businesses with revenues not exceeding EGP 10m by June 2023. This announcement is a part of the Ministry of Finance's broader strategy to streamline tax processes and enhance the relationship between the tax authority and taxpayers. This initiative is embedded in the principles of Law No. 30 of 2023, particularly Article 3, which is designed to settle tax disputes expeditiously before the set deadline of 16 June 2023.

Abdel Aal provided a breakdown of the simplified tax structure, as stipulated under Article 3 of the newly enacted law. The structure introduces a tiered tax rate for businesses based on their annual revenue. Specifically, businesses earning less than EGP 250,000 annually are required to pay a tax of EGP 1,000. Those with revenues falling between EGP 250,000 and EGP 500,000 are subject to a tax of EGP 2,500. Moreover, businesses with earnings between EGP 500,000 and EGP 1m will be taxed EGP 5,000.

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For businesses with larger revenue streams, the tax rates are proportionally adjusted. Specifically, those with revenues from EGP 1m to less than EGP 2m will be taxed at 0.5% of their revenue. Businesses earning between EGP 2m and EGP 3m will face a tax rate of 0.75%, while those with revenues ranging from EGP 3m to EGP 10m will be taxed at 1% of their revenue.

Abdel Aal further clarified the comprehensive nature of this initiative, noting that various committees, including missions, internal, appeals, dispute resolution, and those dedicated to combating tax evasion, will automatically implement the provisions of Article 3. This approach underscores the government's commitment to a more efficient and equitable tax system, where the enforcement of this article does not depend on taxpayer requests. However, taxpayers still maintain their right to seek accountability under Law No. 91 of 2005 and its amendments.

The head of the Egyptian Tax Authority also pointed out that the application of Article 3 spans across all tax categories, with the exception of real estate transaction taxes. She emphasized that the annual revenue for tax calculation purposes should exclude payroll taxes and similar levies, ensuring a fair and transparent assessment for businesses across Egypt.

Through this initiative, the Egyptian Tax Authority is taking a significant step towards alleviating the burden on businesses and simplifying the tax dispute resolution process. By setting a firm deadline and providing a clear framework for tax dues, the authority aims to foster a more cooperative and productive relationship with the business community, ultimately contributing to the country's economic stability and growth.