The Micro, Small, and Medium Enterprises Development Agency (SMEDA) is engaged in a new round of negotiations with the Ministry of Finance on tax incentives under the MSMEs Law, according to SMEDA CEO Nevin Gamea.
The Finance Ministry in the era of former Minister Amr El-Garhy had reservations about the incentives set by the SMEDA, which aims to annex the informal economy.
In response to questions by Daily News Egypt, Gamea said that they are in talks with current Finance Minister Mohamed Moeit to reach an agreement on these incentives.
According to Gamea, the law is currently being studied by the legislative committee of the Ministry of Justice, expected to be referred to Parliament at the beginning of the next parliamentary session.
She added that the SMEDA will hold many sessions with all concerned government agencies and banks to discuss the law.
The SMEDA had finalised the law months ago in cooperation with the legal adviser to the minister of trade and industry, and the law was reviewed by the cabinet.
According to Gamea, this law includes a unified definition of MSMEs to suit economic changes, as well as the establishment of advantages and facilitation of procedures for the informal sector, with the aim of encouraging it to adjust its situation and transform it into the formal sector.
She added that the SMEDA has coordinated with the Central Bank of Egypt (CBE) to comply with the definitions of projects listed in the law with the definitions of the CBE.
“The MSMEs Bill adopts a wide range of incentives that will guide entrepreneurs and stimulate entrepreneurs in the informal sector to enter the formal sector,” she said.
This includes some tax incentives, as well as a combination of incentives associated with technical training, streamlining of constituent procedures, and other incentives to ensure that those wishing to set up projects have high chances of success for their projects.
The new law will allow SMEDA to finance medium-sized projects, since the old law 141/2004 does not include medium-sized enterprises but only micro and small enterprises.
Although Gamea stressed the importance of tax incentives for entrepreneurs in the informal sector to join the formal economy, she stressed that these incentives are not everything for the owners of these projects, but it is very important to facilitate the work procedures, which is already happening through the one-stop shop.
She pointed out that the SMEDA ultimately aims to access the tax system to the form that satisfies the owners of projects and government together, as taxes are one of the most important resources of the state.