FinMin studies setting a ceiling on Egypt’s healthcare tithe next year
EXCLUSIVE- FinMin studies setting a ceiling on healthcare tithe next year: The Finance Ministry is studying a proposal that would set a limit on the healthcare tithe paid by businesses to fund the new universal healthcare system, a senior official from the Finance Ministry told Enterprise on Monday. Under the measure now being considered, businesses would still pay the 0.25% levy on revenues, but the payment would be capped at an amount equivalent to 1.5% of total net profits, the source said.
The proposal would also see lossmaking companies making a basic contribution. Any company making a loss on its books will have to pay an EGP 1,000 healthcare tax for the year. Sole proprietorships (companies owned and operated by one person) making a loss would have to pay a minimum tax of EGP 100. The ministry decided against exempting loss-making companies from the tax as it could “open the door for tax fraud,” the source added.
A concession to appease the business community: The proposal was drafted as a sop to the business community, which had been advocating for the 0.25% levy to be transformed into a surtax on pre- or post-tax profits. This proposal is expected to reduce their tax burden, the official said. He hinted that this year’s take from the healthcare tax had fallen short of projections. “We were unable to explore these amendments for the current fiscal year as the timeframe of implementing the tax has not allowed us to,” he added. If enacted, these proposed amendments to the healthcare tax would go into effect in FY2019-2020.