Tax Authority prepares draft law to settle over EGP 10m worth of back taxes

Mokhtar Tawfik, head of the Egyptian Tax Authority, said that the authority is embarking on a new era with taxpayers through providing more facilitations as the system transforms into an automated and digitized one.

In a statement he made today, Tawfik said that there is a draft law in the parliament now to settle back taxes worth less than EGP 10m. Additionally, another draft law is underway to settle back taxes of over EGP 10m.

Ragab Mahrous, advisor to the head of the Egyptian Tax Authority, said that, in implementation of the presidential directives, a draft law is currently being prepared to settle back taxes, based on the Micro, Small, and Medium Enterprises Development Law.

He added that the Micro, Small and Medium Enterprise Development Law No. 152 of 2020 provided great opportunities that taxpayers never had before. He also explained that the law includes a simplified and permanent tax system for these projects, in a way that contributes to reducing tax burdens and facilitating procedures, in order to ensure their encouragement and raise their operational efficiency and capabilities.

He pointed out that if sales or business are less than EGP 250,000, the tax is valued at EGP 1,000 annually. If it is less than EGP 500,000, the tax would be EGP 2,500. If it is less than EGP 1m, the tax is EGP 5,000 annually. If annual sales range from EGP 1m to less than EGP 2m, the tax is 0.5% of the sales volume. If it ranges from EGP 2m to less than EGP 3m, the tax is 0.75%. If it ranges from EGP 3m to EGP 10m, the tax is 1%.

He explained that the size of the project subject to the simplified tax treatment is determined every five years based on the examination conducted by the Tax Authority, and the taxpayer is taxed in the next five years based on the examination result.