Promoting Industrial Growth and Encouraging Foreign Direct Investment in Egypt
Taxation
- The raising of the VAT registration threshold to LE500,000, in the accordance with the Value-Added Tax Law, will lead many enterprises to exit the formal economic sphere, and thus the state coffers lose out on potential tax revenues.
- Adopt a lump-sum tax regime, whereby a fixed amount of money is collected from enterprises—a flat tax. The collected amount should not be subject to any increase except if a review of invoices and other relevant documentation revealed that the amount of taxes due exceed the amount paid by the enterprise.
- Give serious consideration to implementing the tax facilitation and procedural simplification measures proposed by the Ministry of Trade and Industry in the Micro, Small, and Medium-sized Enterprises draft law.
- Develop a simplified tax system for small and medium-sized enterprises under the unified tax system in order to reduce the tax burden and compliance costs for these enterprises; at the same time, introduce a lump-sum tax regime tax for micro enterprises.
- On July 13, 2020, the President ratified the Micro, Small, and Medium-sized Enterprises Development Law (No. 152 of 2020); it includes provisions intended to facilitate financing and the starting up of operations, in addition to offering incentives for MSMEs, including permanent simplified methods for tax treatment.