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Egypt Announces Exempting Strategic Industrial Projects from Certain Taxes


Wed 19 Jun 2024 | 08:54 PM
Taarek Refaat

Minister of Finance Mohamed Maait confirmed that the Egyptian state is working to implement financial policies that push the private sector to lead development and economic growth, in a way that contributes to attracting more local and foreign investments, especially with setting a maximum of 1 trillion pounds for public investments for all state agencies during the next fiscal year.

The minister added, in a statement Wednesday that the state is working to share with investors the global and local inflationary burdens, to reduce production costs and stimulate exports, taking into account many tax, customs and investment incentives.

Maait pointed out that up to 40.5 billion pounds have been allocated in the next fiscal year’s budget to finance programs to stimulate economic activity, especially supporting the industrial sector and export activities, and other initiatives that include  23 billion pounds to continue the rapid response to export burdens.

In the industrial sector, the state will continue to bear the financial burden including the reduction of electricity prices at an annual cost of 6 billion pounds, in addition to 1.5 billion pounds in cash incentives for SMEs.

The minister pointed out that 500 million pounds will be provided to support the automobile industry strategy, and 1.5 billion pounds annually incentives for real estate taxes on some industrial and production activities until the end of 2026.

The Minister noted that the incentives also include exempting strategic industrial projects from some types of taxes for a period of 5 years, with the possibility of recovering a percentage of the value of the land and investment costs of up to 50%, provided that the project is implemented within half the specified period.

Maait said that there is an “investment incentive” of 33% to 55% of the tax due on the profit earned from green hydrogen projects and strategic industries.

In addition, customs exemption will be implemented on most parts and components of mobile phone devices, and reducing the customs tax on others so that it does not exceed 2%, after it had previously reached 20-30%, to encourage their local manufacture. Also, the development fee on parts, components and the final product of mobile phones made in Egypt has also been abolished.