CAIRO: “The Ministry of Finance is drafting a definite tax on Small and Medium-Size Enterprises (SME) to increase Egypt’s revenues of taxes, solve the sectors problems as a whole, and to promote the sector to reach probable limit,” Head of Egyptian Tax Authority Mustafa Abdel Kader said Saturday.
During the Egypt Tax Society symposium about the new tax amendments, Abdel Kader refused to get any additional information of the tax value or when it will be applied, Al-Masry Al-Youm reported.
The ministerial draft will include fine ranges between 10,000 and 50,000 EGP on SME owners who refuse to get information about their activities for tax collectors, he added.
SME’s definite tax will not only impact the investments sector but will also impact the owners themselves since a large number of them are poor, head of the Federation of Economic Development Associations Fouad Thabet said in a phone interview with The Cairo Post.
Over article 141 for 2004 of tax regulations, SMEs are exempted from paying taxes of the first five years, he said and recommended that the government should study the financial situation of SME owners to avoid harming the poor.
The associations held many meetings in the past few months, calling on additional exemption periods for Micro Enterprises to ease burdens on the poor and to boost such enterprises.
The associations will not object imposing taxes on SMEs that have financial solvencies. But the associations will call exempting on the enterprises especially since more than one third of these enterprises are owned by breadwinning women, he added.
SMEs represent 90 percent of total companies in Egypt and provides between 70-80 percent of Gross Domestic Product (GDP) and about 75 percent of job opportunities, Ahram Gate reported.
The importance of SME industries lies in their ability to create job opportunities, diversify incomes, and boost growth rates.