Egypt's New Tax Law Simplifies Filing for Startups, Boosts Digital Economy

Dr. Ragab Mahrous, an advisor to the head of the Egyptian Tax Authority, shared the details of the new Simplified Tax Procedures Law. This law aims to support startups and entrepreneurs, making it easier to bring the informal economy into the official system. This move is expected to boost voluntary compliance and drive economic growth. Mahrous explained during the Financial Technology and Finance conference that this law applies to businesses with annual revenues under 20 million EGP, with tax rates ranging from 0.5% to 1%. The law also requires businesses to issue an electronic invoice when dealing with a registered seller, or an electronic receipt when providing a service to the final consumer, keeping pace with the market's digital transformation. The law offers several benefits to startups and entrepreneurs. These include exemptions from withholding tax and contract notarization fees, plus exemptions on capital gains taxes from selling machinery and equipment. This is all part of the government's efforts to simplify tax procedures, improve transparency, and encourage voluntary compliance in the local market. Mahrous also mentioned that taxpayers will now submit a tax declaration every three months, meaning four declarations annually for Value Added Tax (VAT). He stressed that this new system is easy and straightforward, fully compatible with automated procedures and digital transformation. It will continue to apply to large taxpayer centers in the first and second categories. Finally, Mahrous confirmed that the law is designed to keep up with e-commerce activities. It allows individuals to open a tax file using their national ID number, avoiding the complexities of the traditional system. This truly shows the Tax Authority's vision to create a more favorable investment environment for small and medium-sized enterprises (SMEs) and entrepreneurs, and to support the digital economy across the board.