Mohamed Maait, Minister of Finance instructed the Egyptian Tax Authority to implement new amendments to the income tax law, which contributes to establishing the foundations of tax justice, and improving tax brackets.
The Ministry of Finance seeks to contribute to income tax adjustments in achieving tax savings for the lower-income, middle and upper middle classes, and to address the distortions of the previous system that were based on the tax deduction, in a manner that helps reduce the burdens on citizens.
Maait pointed out that the tax exemption limit has increased by 60%, as the exempted portion has been raised from EGP 8,000 to EGP 15,000, in addition to increasing the personal exemption limit for salaries starting EGP 7,000- 9,000. Also, the annual income for those with salaries up to EGP 24,000 annually will be totally exempted.
Meantime, the Tax Authority issued a periodic guide that contributes to the strict application of the income tax in accordance with the new amendments, as it includes indicative models that help in facilitating executive mechanisms, in a manner that achieves tax justice.
The head of the Tax Authority, Reda Abdel-Qader said that the income tax like will be calculated on two periods this year. "The first period will start from January 1 to the end of June, and the tax deduction system will be applied during this period to what was achieved from revenues before the first of July. The new amendments will be applied from the beginning of July to the end of December 2020," Abdel-Qader added.
He pointed out that taxes will be collected on the income generated from commercial and industrial activity or the non-commercial professions, as well as the income on real estate during the 2020 tax period, noting that taxpayers are obligated to conduct one tax settlement at the end of the year for the amounts that exceed the tax due.
Ministry of Finance issues new income tax brackets
According to the Ministry of Finance statement, a new social bracket has been created for low-income citizens with an annual net income ranging from EGP 15,000-30,000 at 2.5%, as well as the creation of a new bracket for citizens with higher incomes than 400,000 annually at 25%.
Income Bracket Tax
EGP 15,000-30,000 2.5%
EGP 30,000-45,000 10%
EGP 45,000-60,000 15%
EGP 60,000-200,000 20%
EGP 200,000-400,000 22.5%
EGP 400,00 and above 25%
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