Finance Ministry looks to make it even easier for SMEs to become taxpayers
EXCLUSIVE- Has the Finance Ministry further simplified its plan to bring SMEs into the ranks of taxpayers? Speaking of inclusion, the Finance Ministry may be modifying previously outlined plans to offer SMEs of a certain size full or partial tax exemptions to enter the formal economy as part of the SME Act. Instead, the ministry is looking at requiring SMEs of a certain size a flat tax based on the size of their top line, Tax Authority sources tell Enterprise. The move makes a lot of sense.
Grow the tax base by making it easy to go legit: Businesses with an annual revenue of up to EGP 250k or less would face a fixed tax bill of EGP 2,000 per year under the proposal. Those making between EGP 251-500k will pay EGP 5,000 a year, while enterprises making EGP 501k-1 mn will be taxed EGP 10,000. Further incentives will be granted if these business register with the Tax Authority, the source said, stopping short of getting into specifics.
Small business owners can forget about utilities if they don’t register with the tax man: The Tax Authority is looking at how to coordinate with state utility providers to monitor spending by SMEs and ensure they are registered. Sources tell us that obtaining access to water and electricity will be conditional on a business registering with the Tax Authority.
The ministry hopes to net EGP 3-4 bn from provisions of the SME Act in year one alone, our source added.