CAIRO: Egypt‘s government is expected to approve on Wednesday a lower tax ceiling for companies and individuals in high income brackets in order to attract investors and boost the economy, the investment minister said.
The step comes days before Egypt holds an investment conference in the Red Sea resort of Sharm el-Sheikh it hopes will attract billions of dollars and speed up an economic recovery after four years of political turmoil.
Under the planned tax reform, the ceiling on companies and individuals earning more than one million Egyptian pounds ($131,148) a year will be reduced from 25 percent to 22.5 percent for a period of ten years.
“The cabinet will agree today in a meeting on unified taxes,” Investment Minister Ashraf Salman told Reuters in a telephone interview.
“The new changes will encourage investment and lead to justice in the tax system for all.”
The minister said a temporary 5 percent tax on wealthy individuals earning over one million Egyptian pounds ($131,061) a year will be canceled as part of the news tax regime. When applied in 2014, the temporary tax was supposed to last for three years.
The new tax regime will be finalized in about three weeks and is expected to be implement in the 2015-2016 fiscal year starting in July, said Salman.
President Abdel Fatah al-Sisi has cut fuel subsidies and enacted other reforms, winning praise from foreign investors and the International Monetary Fund.
He has also announced mega-projects such as a second Suez Canal and roadworks designed to create jobs and stimulate economy activity in the most populous Arab country.
The government hopes the new tax structure will boost an economy battered by political upheaval and militant violence since an uprising toppled autocrat Hosni Mubarak in 2011.