Egypt’s Cabinet to determine which industries are eligible for income tax relief program
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EXCLUSIVE- Businesses will find out before month’s end whether they are eligible for corporate income tax relief: The Madbouly Cabinet will issue a decision as early as next week on which industries are and are not eligible for the income tax relief program ordered by President Abdel Fattah El Sisi, a senior government official told Enterprise yesterday. The program, which El Sisi announced last week, will allow businesses in industries that have been affected by the covid-19 outbreak to pay corporate income taxes in three instalments, with the final instalment due on or before 30 June.
The key here is how Cabinet will choose to define “affected” industries. Our source remained tight-lipped on which industries are most likely to be eligible for the program, but signaled that it would likely be sector-specific. Obvious candidates include tourism and aviation, both of which have ground to a complete halt. Other senior government officials we spoke with last week had suggested that the government could make the relief plan available for all businesses since the slowdown has touched most industries.
Cabinet will also decide on the program’s fine print, including whether eligible businesses will have to submit individual requests to participate in the instalment program or if they’ll be automatically enrolled. We’re also waiting to find out whether Cabinet will require the instalments to be three equal chunks. The sources we spoke with last week had said taxes would need to be paid in three equal installments on 30 April, 30 May, and 30 June.
Reminder: There will be no interest, fines, or late fees for businesses benefiting from this program.
Meanwhile, don’t expect the government to budge on the healthcare tithe, which businesses will be required to pay when they file and remit their taxes, the official tells us. The fee — which will be calculated as 0.25% of all companies’ revenues — will be used to fund the new universal healthcare system. The tithe is not tax deductible.
Companies need to pay other taxes including wage taxes, VAT and withholding taxes on schedule, our source stressed.
Not at issue: Breathers on real estate tax for companies in tourism and select sectors of manufacturing, as well as changes to the stamp tax, both of which were announced earlier in the covid-19 outbreak as part of the government’s wider policy response.