Minister of Finance Mohamed Maait has instructed for the Egyptian Tax Authority (ETA) to implement amendments to the Income Tax law in a way that contributes to establishing tax justice.
The amendments come under Income Tax Law 26/2020, that aims to improve tax brackets, whilst addressing and rectifying the distortions of previous system that were based on tax deduction. The amendments to Egypt’s Income Tax Law aim to help reduce the burdens on citizens.
Maait noted that the tax exemption limit would be increased by 60%, with the exempted portion for each financier raised from EGP 8,000 to EGP 15,000. This comes in addition to increasing the personal exemption limit for salaries from EGP 7,000 to EGP 9,000, with those on an annual income of up to EGP 24,000 exempted from income tax.
ETA Head Reda Abdel Qader said that taxes on salaries will be calculated based on two six-month taxation periods during the current year. The first of these will take into account the period between 1 January to the end of June 2020, with the tax deduction system to be applied during this period on revenues before 1 July only. Meanwhile, the new amendments will be applied to salaries covering the taxation period from the beginning of July to the end of December 2020.