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Tuesday, 31 December 2019

House committee to wrap up Egypt’s new SMEs Act in March

LEGISLATION WATCH- SMEs Act up for final vote in March 2020: The House of Representatives’ SMEs committee is expected to wrap up its discussion of the proposed SMEs Act sometime in March 2020, committee deputy chair Hala Abou El Saad said. The SMEs Act would provide a legal framework to regulate SMEs and encourage their much-needed integration into the formal economy. It received preliminary committee approval last month, but still needs to get a final committee signoff before being tabled for a final general assembly vote. The committee has postponed discussions of incentives SMEs would receive under the framework and of the draft’s proposed tax treatment of SMEs to 12 January, Abou El Saad says. Those discussions will need the Finance Ministry on board.

The bill would provide plenty of carrots for SMEs to go legit: The incentives are expected to cover tech-based and AI startups, as well as small and medium factories that use locally sourced materials and regularly scale up their in-house technology. Livestock and agriculture projects and those that work in renewable energy or emerging tech will also be considered, Abou El Saad said. Incentives can come in the form of utility bill discounts or waivers, state-funded vocational training, or subsidized land allocations. The Finance Ministry said in September that the act would exempt SMEs from paying stamp tax, land registration fees, and fees to register contracts to set up companies, among other things. The overall incentive package could cost the government EGP 1.5-2 bn each year.

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