Egypt - Minister of Finance Ahmed Kouchouk said concessional financing will be provided to the first 100,000 taxpayers who join the simplified tax system, stressing that the move aims to support taxpayers, ease compliance, and help businesses expand.

Speaking during a Monday panel discussion at the Egyptian Centre for Economic Studies, Kouchouk said that sample-based audits will be applied to tax returns this year. He added that penalties will be capped at the value of the principal tax amount, and announced plans to establish three specialised tax centres through which the e-Tax system will deliver easier and more advanced services using the latest automation tools.

Kouchouk said he welcomed the professional, candid and balanced dialogue with business leaders and representatives, noting that it reflected the most pressing challenges facing the private sector. “Our economic vision is based on openness, simplification and the creation of new horizons for competition and export opportunities for all companies operating in Egypt,” he said.

He added that the government is focusing on supporting sectors and activities in which Egypt has a competitive advantage, providing them with appropriate forms of support. In this context, he said the state is targeting a larger and more impactful role for the private sector to lead economic growth, create jobs and generate sustainable additional income.

The finance minister noted that rebuilding trust with the business community depends on delivering tangible and effective improvements in tax, customs and real estate-related services. He said the government is engaging with the private sector using a new approach based on effective incentives, pointing to the strong response to the first package of tax facilitations.

Kouchouk explained that the second package of tax facilitations is being developed in line with proposals submitted by committed partners through ongoing community dialogue. The package includes replacing capital gains tax on trading with a stamp duty, alongside other incentives to encourage company listings on the Egyptian Exchange; simplifying and accelerating VAT refund procedures; allowing set-off against credit balances; launching a mobile application for real estate transactions; and fixing the real estate transaction tax at 2.5% of the unit’s sale value for individuals, regardless of the number of transactions. 

Additional measures include reducing VAT on medical devices from 14% to 5% and launching an electronic advisory platform to provide taxpayers with accurate and timely technical guidance.

The minister also said that ten facilitations are being targeted within the real estate tax system to simplify procedures and ease burdens on citizens and investors. These include raising the exemption threshold for private residences to EGP 4m, allowing tax write-offs where warranted, submitting a single simplified tax return regardless of the number of properties owned, and recognising electronic payment methods.

Kouchouk noted that the Ministry of Finance is coordinating with the Ministry of Investment to implement clear measures to improve the trade system, reduce customs clearance times and support industry and exports. These measures include customs facilitations to stimulate transit trade, the introduction of a comprehensive risk management system, new incentives for participants in the Authorised Economic Operator programme, and the unification and acceleration of customs procedures across all ports to boost foreign trade activity.

He stressed that the government is also working to remove what he described as a “black cloud” weighing on development efforts, through impactful measures aimed at reducing the size and burden of debt related to budgetary entities.

For his part, Deputy Minister for Tax Policies Sherif El-Kilany said the Advance Cargo Information (ACI) system was instrumental in enabling rapid progress towards customs facilitation measures. He noted that modernising the customs system helps reduce clearance times, strengthen governance and enhance the competitiveness of the Egyptian economy.

Omar Mohanna, Chairperson of the Egyptian Centre for Economic Studies, expressed appreciation for the ongoing tax transformation aimed at building a partnership with the business community based on trust and certainty, adding that he looks forward to completing this reform path to achieve tangible improvements in tax services.

Meanwhile, Abla Abdel Latif, Executive Director and Director of Research at the Centre, said that, at the request of the Ministry of Finance, the Centre is currently preparing a comprehensive and independent evaluation of the outcomes of the first package of tax reforms. She noted that this marks the first time a neutral research institution has undertaken an assessment of government performance on this scale.

Abdel Latif called on other institutions to adopt similar independent evaluation approaches to ensure efficiency, transparency and a clearer understanding of the real impact of economic policies on the business environment.

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