Back to the complete issue
Tuesday, 14 April 2020

Egypt’s Cabinet to determine which industries are eligible for income tax relief program

EXCLUSIVE- Businesses will find out before month’s end whether they are eligible for corporate income tax relief: The Madbouly Cabinet will issue a decision as early as next week on which industries are and are not eligible for the income tax relief program ordered by President Abdel Fattah El Sisi, a senior government official told Enterprise yesterday. The program, which El Sisi announced last week, will allow businesses in industries that have been affected by the covid-19 outbreak to pay corporate income taxes in three instalments, with the final instalment due on or before 30 June.

The key here is how Cabinet will choose to define “affected” industries. Our source remained tight-lipped on which industries are most likely to be eligible for the program, but signaled that it would likely be sector-specific. Obvious candidates include tourism and aviation, both of which have ground to a complete halt. Other senior government officials we spoke with last week had suggested that the government could make the relief plan available for all businesses since the slowdown has touched most industries.

Cabinet will also decide on the program’s fine print, including whether eligible businesses will have to submit individual requests to participate in the instalment program or if they’ll be automatically enrolled. We’re also waiting to find out whether Cabinet will require the instalments to be three equal chunks. The sources we spoke with last week had said taxes would need to be paid in three equal installments on 30 April, 30 May, and 30 June.

Reminder: There will be no interest, fines, or late fees for businesses benefiting from this program.

Meanwhile, don’t expect the government to budge on the healthcare tithe, which businesses will be required to pay when they file and remit their taxes, the official tells us. The fee — which will be calculated as 0.25% of all companies’ revenues — will be used to fund the new universal healthcare system. The tithe is not tax deductible.

Companies need to pay other taxes including wage taxes, VAT and withholding taxes on schedule, our source stressed.

Not at issue: Breathers on real estate tax for companies in tourism and select sectors of manufacturing, as well as changes to the stamp tax, both of which were announced earlier in the covid-19 outbreak as part of the government’s wider policy response.

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; Mashreq (tax ID: 204-898-862), the MENA region’s leading homegrown personal and digital bank; Industrial Development Group (IDG) (tax ID:266-965-253), the leading builder of industrial parks in Egypt; Hassan Allam Properties (tax ID:  553-096-567), one of Egypt’s most prominent and leading builders; and Saleh, Barsoum & Abdel Aziz (tax ID: 220-002-827), the leading audit, tax and accounting firm in Egypt.