Egypt private investment grows 73% as government flags further tax cuts

Egypt’s private sector investments surged by 73% during the previous fiscal year and continued to grow at a rate of 42% in the first quarter of the current year, Finance Minister Ahmed Kouchouk said on Monday.

Speaking at an Alexandria Businessmen’s Association (ABA) event, Kouchouk stated that the “bet on the private sector” to drive growth and enhance the competitiveness of the Egyptian economy is “always a winning one.” He added that the government’s economic ministerial group is working with “great harmony” to expand the private sector’s contribution to the national economy.

The minister revealed that more than 600,000 taxpayers have voluntarily submitted new or amended tax returns, resulting in approximately EGP 80bn in additional tax payments. These taxpayers disclosed a total business volume of EGP 1trn. Kouchouk noted that tax revenues grew by 35% last year and by 31.5% during the first eight months of the current fiscal year, achieved without any changes to tax rates.

Kouchouk outlined several forthcoming measures under a second package of tax facilities, which followed more than 40 community dialogue sessions. The government plans to introduce an “Excellence Card” for compliant taxpayers, granting them priority in tax refunds, inspections, and obtaining advance rulings. Additionally, the first 100,000 participants to join a simplified tax system will have access to low-cost, facilitated financing.

The government is also set to launch three advanced tax centres managed by e-Tax to provide specialised services on behalf of the Egyptian Tax Authority. Other planned reforms include addressing double taxation on dividends between subsidiary and holding companies, and the introduction of a mobile application for real estate disposal tax to facilitate electronic notifications and payments.

Further incentives aimed at reducing the burden on the private sector include:

• Reducing value-added tax (VAT) on medical machinery and equipment from 14% to 5% to support expansion in the healthcare sector.
• Exempting e-payment and electronic collection company services from VAT.
• Exempting individuals from real estate disposal tax when selling units to first-degree relatives.
• Deducting interest on foreign loans from the tax base for private sector companies participating in strategic projects.
• Standardising airport departure fees and issuing a manual for administrative seizures to ensure fairness and transparency.

The minister also highlighted incentives designed to encourage major companies to list and trade on the Egyptian Exchange.

Mohamed Henno, Chairperson of the ABA, said the participation of the finance and industry ministers at the event reflected “continuous coordination” between the government and the private sector. Henno affirmed the association’s support for the government’s programme to build a competitive economy through investment promotion and foreign trade.

While praising the government’s efforts and the resulting positive economic indicators, Henno noted that capturing available economic opportunities requires further improvements in government efficiency and an accelerated pace of digital transformation.