Parliament approves new law to circumvent 65% fines and interest on back taxes


FILE – Egyptian Parliament

CAIRO – July 17, 2022: The House of Representatives has approved a new law to circumvent 65% of fines, late payment interest and additional taxes on tax, customs and property tax arrears, provided that the initial tax is paid before the end of next August, according to Finance Minister Mohamed Maait.

“The door will be open to file tax disputes after the end of the Eid al-Adha holiday and until the end of December this year; this will help ease the burden on the productive sectors given the negative repercussions of the war in Europe,” the finance minister said.

The Ministry of Finance has allocated LE 1.1 billion in the current fiscal year budget to complete 13 industrial complexes in the governorates, to provide stimulating infrastructure for owners of small, medium and micro enterprises, according to a statement. of the Ministry of Finance. Finance.

“We will continue to support the industry in every way possible to transform the current global crises into favorable development opportunities for the Egyptian economy, thus contributing to the strengthening of our production capacities in various sectors, food security, expanding the export base and increasing the competitiveness of Egyptian products in international markets,” said Finance Minister Mohamed Mait.

“In recent years, many tax and customs incentives have been approved to deepen domestic production, lay the foundation for industrial development, and deepen domestic manufacturing, especially in the fields of agriculture and industry, to achieve self-sufficiency in food and strategic products, and reduce the inflation bill imported from abroad,” he added.

“Recent amendments to the Value Added Tax Law include exemptions that stimulate industry, including the suspension of payment of tax on machinery and equipment imported from abroad for use in industrial production for a period of one year from the date of their publication and their deletion as from the start of production”, according to the Minister of Finance.

Amendments to the Value Added Law included granting goods or services exported abroad by special economic zone projects, or imported into them, the same tax treatment as exported goods or services. or imported by projects of regions, cities and customs duties. duty-free shops abroad, subject to a “zero” rate tax. This is to encourage investment in special economic zones by not charging value added tax on goods or services imported for these projects, according to the Minister of Finance.

The minister pointed out that the recent customs tariff adjustments also include reduction of “import tax” on more than 150 types of production inputs and requirements to boost domestic industry.

The Minister explained that the Cabinet has agreed that the State Treasury will bear the value of the property tax due on real estate built for the industrial sectors, for a period of three years, starting on January 1, 2022, from an expected total cost. of LE 3.3 billion. This helps to support the state’s efforts to localize the industry and keep the local production wheel going, noting that LE 3 billion has been allocated as part of huge financial incentives that have been announced to deepen the automotive industry in Egypt, starting from the new fiscal year, in particular to promote the transition to the use of gas and electricity.

“We continue to pay late export charges to exporting companies, and the total amount that has been paid since the start of the initiatives to pay arrears to exporters with the Export Development Fund in October 2019 until now, is of around LE 35 billion,” Maait noted.

He added that the new phase of export support will be launched in the coming period, and LE 6 billion has been allocated in the new budget to support and develop exports, and LE 5 billion has been allocated to support the reduction in the price of electricity for the industrial sector.

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