Back to the complete issue
Monday, 18 November 2019

Draft SMEs Act gets early nod from House committee

LEGISLATION WATCH- Draft SMEs Act gets early nod from House committee: The proposed SMEs Act, which would provide tax and non-tax incentives for small and medium-sized businesses to join the formal economy, received preliminary House committee approval yesterday, according to Masrawy. The current 76-article draft provides a legal framework to regulate SMEs and integrate them into the formal sector, SMEs Development Authority head Nevine Gamea said. The legislation still needs to pass committee-level discussions before making its way to the general assembly for a final vote. If approved, the bill would then be signed into law by President Abdel Fattah El Sisi.

What we know so far: The Finance Ministry said in September that the act would exempt SMEs from paying stamp tax and land registration fees. Fees to register contracts to set up companies and credit facilities would also be waived for the first five years after commercial registration. The SME tax incentives package could cost the government EGP 1.5-2 bn each year.

The legislation may also give SMEs preferential tax rates: An official with knowledge of an earlier draft told us in April that SMEs would pay a fixed rate of tax over a three-year period regardless of revenue growth. Government entities will also be working to issue licenses and ensure SMEs are included in public procurement tenders and auctions, Trade Ministry advisor Hisham Ragab told the local press at the time.

Enterprise is a daily publication of Enterprise Ventures LLC, an Egyptian limited liability company (commercial register 83594), and a subsidiary of Inktank Communications. Summaries are intended for guidance only and are provided on an as-is basis; kindly refer to the source article in its original language prior to undertaking any action. Neither Enterprise Ventures nor its staff assume any responsibility or liability for the accuracy of the information contained in this publication, whether in the form of summaries or analysis. © 2022 Enterprise Ventures LLC.

Enterprise is available without charge thanks to the generous support of HSBC Egypt (tax ID: 204-901-715), the leading corporate and retail lender in Egypt; EFG Hermes (tax ID: 200-178-385), the leading financial services corporation in frontier emerging markets; SODIC (tax ID: 212-168-002), a leading Egyptian real estate developer; SomaBay (tax ID: 204-903-300), our Red Sea holiday partner; Infinity (tax ID: 474-939-359), the ultimate way to power cities, industries, and homes directly from nature right here in Egypt; CIRA (tax ID: 200-069-608), the leading providers of K-12 and higher level education in Egypt; Orascom Construction (tax ID: 229-988-806), the leading construction and engineering company building infrastructure in Egypt and abroad; Moharram & Partners (tax ID: 616-112-459), the leading public policy and government affairs partner; Palm Hills Developments (tax ID: 432-737-014), a leading developer of commercial and residential properties; Etisalat Misr (tax ID: 235-071-579), the leading telecoms provider in Egypt; and Industrial Development Group (IDG) (tax ID:266-965-253), the leading builder of industrial parks in Egypt.