Egypt Approves Unified Profit Tax as Alternative to Corporate Fees

Egyptian President Abdel Fattah El-Sisi has directed that fees charged by various government agencies and entities be replaced with a unified additional tax representing a percentage of net profit, according to a statement issued by the Presidency on Sunday.

Egypt currently collects a 22.5% corporate income tax and began collecting a 0.26% solidarity contribution tax on total annual corporate revenues in the 2019 tax season as part of the Comprehensive Health Insurance Law.

The Egyptian government intends to increase targeted tax revenue on goods and services by 34.4% year-on-year to EGP 1.103 trillion during the 2025/26 fiscal year, driven by an expected 50.2% increase in value-added tax (VAT) revenue on local and imported goods.

During his meeting with the Prime Minister and a number of ministers from the Economic Group today, Sisi reviewed the government's efforts to improve the business climate and attract more local and foreign investment. The meeting also reviewed the procedural burdens borne by investors and the proposed plan to alleviate these burdens, such as unifying the collection authority and launching a platform for economic entities.

Egypt, where taxes constitute more than two-thirds of its budget revenues, aims to collect approximately EGP 2 trillion in taxes during the current fiscal year, which ends in June.

Tax revenues in Egypt increased by 38% year-on-year during the first half of the current fiscal year (2024/25), reaching EGP 913.4 billion, according to a government official who spoke to Bloomberg earlier.

The replacement of fees with a unified corporate profit tax coincides with the Ministry of Finance's intention to collect taxes and fees from economic entities and sovereign bodies, including the New Urban Communities Authority, starting this fiscal year. This will contribute to achieving "significant tax revenue."

The statement issued today indicated that the Egyptian government is in the process of allowing the payment of customs clearance fees after bank business hours, with the aim of reducing the number of days required for customs clearance from 8 to 6, while maintaining customs services during official holidays and Fridays.

The meeting also discussed the new program for refunding export burdens, which aims to support national industry and increase Egyptian exports to various global markets.

During the meeting, President El-Sisi emphasized the need to give the private sector a pivotal role in driving the economy and increasing exports. This can be achieved by encouraging national investments in production and export, and providing the necessary services to exporters.