The new draft law on the development of small, medium and micro enterprises, includes many tax and non-tax incentives to support this vital sector, as one of the pillars of the national economy, according to Egypt’s Finance Minister Mohammed Maait.
The Minister added that this sector will witness a qualitative leap and a radical development in its productive capacities once the law is passed, including incentives and benefits.
The draft law includes tax incentives for small, medium, and micro-enterprises, including exemption from stamp duty and fees for documenting the contracts of establishing companies and establishments, and credit facilities contracts for a period of five years from the date of registration in the trade register, Maait added in a statement on Saturday.
They will also be exempted from capital gains arising from the disposal of assets, machinery or production equipment and shall be exempted from the tax due if the proceeds from the sale are used to purchase new production assets, machinery, or equipment within one year.
Maait explained that the draft law includes a simplified tax system to reduce tax burdens and facilitate procedures, which will encourage applicants and increase their operational efficiency and production capacities.
He pointed out that the tax due on registered medium, small, and micro-enterprises at the time of issuance of the new law, or after its issuance, is 1.25 percent for projects with a turnover between $120,000 and $180,000 and 0.75 percent for projects with a turnover between $60,000 and $120,000 per year.
The Minister pointed out that the number of the small, medium, or micro-projects is determined in the light of the final tax assessment of the taxpayer registered with the Tax Authority at the date of enactment of this law, or the first tax return submitted by the taxpayer registered with the Authority.
He stated that the volume of work of the project subject to the simplified tax treatment is determined every five years as set by the Authority, noting that the taxpayer shall be taxed in the next five years according to the Authority’s tax treatment result.
He stressed that the taxpayer may apply to the Tax Authority to submit for tax treatment in accordance with the provisions of the income tax law.
The taxpayer who applies for the provisions of the income tax law may not re-apply for simplified tax treatment until after five years.
Copyright © Saudi Research and Publishing Co. All rights reserved.