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Sunday, 23 October 2022

Cabinet to introduce investment incentives for FX-backed industrial projects

Tax breaks for FX: Companies that use hard currency to fund at least half of the investment cost of industrial projects in Egypt could be handed generous tax breaks under plans greenlit by ministers last week, cabinet said in a statement Thursday. Under proposed amendments to the 2017 Investment Act, companies would receive a tax cut of up to 55% on income generated by projects funded by FX, a move designed to attract more hard currency into the country and shore up its external position.

What we know so far:

  • At least 50% of the project’s cost must be funded by FX;
  • The project should be in operation within six years of the law coming into force;
  • The rebate would be paid to companies within 45 days of the tax return submission deadline.

More details to follow: There’s no word yet on which industries would have access to the incentives. Cabinet said it will issue a decision on eligible projects along with other details on the terms of the incentives.

What’s next: The amendments have been referred to the House of Representatives for discussion and a vote, a source at the House told us yesterday.

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