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New tax incentives encourage informal MSMEs to join formal economy: Finance Minister - Daily News Egypt

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New tax incentives encourage informal MSMEs to join formal economy: Finance Minister

No tax accounting for these projects for years prior to date of submitting reconciliation requests, says Mohamed Maait


Egypt’s Minister of Finance Mohamed Maait has revealed that the country’s new tax incentives included in the Law on the Development of Micro, Small and Medium Enterprises (MSMEs) encourage them to join the formal economy.

This contributes to developing their productive capabilities, providing job opportunities, and advancing the national economy.

Maait said that the new law allows the legalisation of MSMEs operating in the informal economy that practice their activities without a licence.

The minister added that there is no tax accounting for informal economy projects that applied for a temporary licence to adjust their legal situation for the years prior to the date of submitting the request.

He also said that the temporary licence issued for each of these projects supersedes any other legal approvals or procedures.

Maait noted that the new law specifies that taxes are due on informal economy projects that do not exceed the volume of their business, or their sales according to the declaration submitted by the taxpayer.

This covers the validity period of the temporary licence, equivalent to 1% of the project’s turnover, subject to these projects’ business value ranging between EGP 3m and EGP 10m annually.

Additionally, the law specifies a 0.75% tax rate on the turnover for projects whose size ranges between EGP 2m and EGP 3m annually. A tax rate of 0.5% will be applied on projects who have a business volume turnover of between EGP 1m and EGP 2m annually, Maait added.

The minister further pointed out that the new law specified the tax due at EGP 1,000 annually for small informal projects who have an annual business volume of less than EGP 250,000, during the period of validity of the temporary licence.

This is in addition to imposing tax dues estimated at EGP 2,500 annually for projects with an annual business volume ranging between EGP 250,000 and EGP 500,000. The law specifies that EGP 5,000 in annual tax due will be submitted by projects with an annual turnover range of between EGP 500,000 to EGP 1m.

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https://dailyfeed.dailynewsegypt.com/2021/01/30/new-tax-incentives-encourage-informal-msmes-to-join-formal-economy-finance-minister/
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