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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.

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