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Wednesday, 22 April 2020

House approves EGP 10 bn additional provision for FY2019-2020 budget

LEGISLATION WATCH- House approves EGP 10 bn additional provision for FY2019-2020 budget: The House of Representatives’ general assembly has approved the government’s request to allocate an additional EGP 10 bn in the FY2019-2020 budget to help the state fight the covid-19 pandemic, according to Al Mal. The proposal was approved by the cabinet and the House Planning and Budgeting Committee earlier this week.

Cabinet and the House appear to have reached a middle ground on the tax exemption threshold under the Income Tax Act, setting it at EGP 8k, up from EGP 7k proposed by the government and EGP 9k suggested by the committee, according to Al Shorouk. The tax bands have also been changed from the last draft we saw to be as follows:

  • Those earning between EGP 8-30k would be taxed 10%;
  • Those earning between EGP 30-45k would be taxed 15%;
  • Those earning between EGP 45-200k would be taxed 20%;
  • Those earning more than EGP 200k would be taxed at 22.5%.

Parliament’s general assembly will take a final vote on the bill today.

Also approved in principle yesterday:

  • An amendment to the Real Estate Tax Act to exempt unused land from being taxed and give cabinet the power to issue exemptions for some buildings;
  • Amendments to the Emergency Law to give the presidency increased powers. The amendments earned committee-level approval earlier this week;
  • A bill allowing the government to move ahead with its tax relief package to help companies cope with covid-19 repercussions if they commit to keeping all employees
  • An amendment to the Pensions Act to include special bonuses as part of a variable salary, effectively raising the value of pensions.
  • The new SMEs Act, which will include tax and non-tax incentives to support SMEs to go legit. The details of the final bill have not yet been made available but last we heard, there were debates on exempting all SMEs from all taxes for five years.

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