Egypt will bring into effect its new income tax system by the beginning of the financial year 2020/2021, which will start next July, the country’s finance minister Mohamed Maait said on Wednesday.
The new tax system will go for the income earned from industrial and commercial activities, non-commercial professions, and real-estate revenues.
Maait said that the new system is in line with President Abdel Fattah al-Sisi’s directives to achieve tax justice progressively and upgrade income tax quintiles to uplift the living standards of citizens.
The income tax on individuals will be a fair bottom-up tax and will generate tax savings for the lowest, medium, and upper medium income quintiles, he added in a statement.
Maait further explained that the new tax fixes the current system’s flaws, and it includes an increase of the tax exemption limit with 60 percent. The basic exemption limit for every taxpayer has upped from 8,000 Egyptian pounds to 15,000 pounds and the personal exemption on salaries limit has been increased to 9,000 pounds, up from 7,000 pounds.
Accordingly, the employees who earn up to 24,000 pounds annually are exempted from the new income tax. According to the new system, a new quintile has been allocated for low incomes, which their net annual income ranges between 15,000 pounds and 30,000 pounds with a 2.5 percent income tax.
Meanwhile, income taxes on individuals whose annual income ranges between 30,000 pounds and 45,000 pounds will amount to 10 percent instead of 15 percent. Those whose annual income is from 45,000 pounds to 60,000 pounds will be subjected to 15 percent income tax instead of 20 percent, Maait said.
The minister added that income tax on individuals whose income ranges between 60,000 pounds and 200,000 pounds will be 20 percent instead of 22.5 percent. He said that a new 25 percent tax quintile has been appropriated for the higher incomes.
