CAIRO: In its last amendments on real estate tax regulations, the Ministry of Finance agreed to exempt the Small and Mid-Cap Enterprises’ (SME) premises of less-than 1,200 monthly rental value or 100,000 total market value amid efforts to boost the sector, said, minister advisor Tarek Farrag reported Wednesday.
“The Ministry seeks to ease burdens of the poor by exempting such premises and support those in need, and to boost the sector as a whole,” he said and that the decision will greatly serve people in the poor villages and hamlets.
The Ministry of Finance drafted a separate law 117 for 2014 to exempt SMEs and the like premises from paying taxes, he added.
Over article 141 for 2004 of tax regulations, SMEs of such values are exempted from paying taxes in the first five years only. He recommended the government should study the financial situation of SME owners to avoid harming the poor.
The Ministry of Finance discussed drafting a definite tax on SMEs on July 1 to increase Egypt’s revenues of taxes, solve the sectors problems as a whole, and to promote the sector to reach probable limit.
Imposing tax on SMEs 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 told The Cairo Post in July.
The associations will not object imposing taxes on SMEs that have financial solvencies. But the associations will call exempting on the enterprises, especially since breadwinning women own more than one third of the enterprises, Thabet said.
SMEs represent 90 percent of total companies in Egypt, provide 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.