Businesses are getting a breather with two-month extension on the deadline to pay income taxes
Businesses are getting a breather with a two-month extension on the deadline to pay income taxes under a decree issued by President Abdel Fattah El Sisi yesterday that extends the final deadline for payment to 30 June. The decree will allow businesses to pay in three installments, Ittihadiya said in a statement yesterday. The deadline for companies to file and pay taxes was previously 30 April, and the government extended last month the filing deadline for individuals to 16 April. El Sisi’s decree also pushes by three months the deadline for corporate real estate taxes.
There will be no interest, fines, or late fees for anyone choosing to pay by 30 June.
It’s both a helping hand to business and a form of stimulus: The two measures are not just pro-business at a time in which many auditors and finance teams are struggling to complete closing paperwork amid work from home — it is a form of stimulus and gives businesses a lifeline by allowing them to retain cash for a longer period of time. The United States, Canada and the UK had previously gone down similar routes and extended both filing and payment deadlines.
Waiting for more details from the Tax Authority: Businesses will be waiting to hear from the Tax Authority on the required size of payments (must they be equal, or can you back-load them) as well as on whether any of the measures include value-added tax (VAT). Businesses will also want to know whether 30 June is the final date for filing tax returns or whether they’re due earlier.
Hotels and other businesses in the tourism industry are getting a three-month extension of their tax deadline, also with no penalties or late fees, as the government looks to shield the industry that is so far taking the worst hit from the virus outbreak. Hotels and other establishments in the tourism industry will also get a full six-month holiday on their real estate taxes — meaning they will never have to remit taxes for that six-month period.
Businesses were lobbying for the government to give them space to manoeuvre on taxes. El Sisi’s tax decision followed a virtual meeting Finance Minister Mohamed Maait held with several members of the business community to look into proposals to push the tax deadline by two months and to give factories a real estate tax holiday, according to a ministry statement (pdf).
More support for civil aviation, exporters, irregular workers: The president also ordered his government to:
- Make available loans with a two-year grace period for the aviation industry as part of a wider bailout package, which has effectively ground to a halt after the suspension of international flights;
- Have the Export Subsidy Fund disburse at least 30% of overdue subsidies, with each company receiving at least EGP 5 mn apiece;
- Day laborers will receive a EGP 500 monthly salary for three months. The Manpower Ministry had previously said it would disburse EGP 500 to each seasonal worker as a one-time compensation for lost income due to covid-19.