Egypt to Cut Top Income Tax Rate Before Investor ConferenceAhmed Feteha and Ahmed A. Namatalla
Egypt said it will cut its maximum income tax rate days before the start of a conference seeking to boost investment in North Africa’s largest economy.
Ministers approved a top rate of 22.5 percent, the Ministry of Finance said in an e-mailed statement Tuesday. That will replace the ceiling of 30 percent for incomes exceeding one million Egyptian pounds ($132,000) a year, Minister Hany Kadry Dimian said in a television interview. The decision needs to be signed into law by the president.
“It’s a kind of a fiscal stimulus,” Mohamed Abu Basha, a Cairo-based economist at EFG-Hermes Holding SAE, said by phone. “Considering the possible impact on government revenue, the decision is still positive because it frees up cash for investments.”
The new rules won’t affect companies that currently enjoy special tax rates, the minister said. “We want to have a tax system that remains stable for at least ten years,” he said.
Egypt is trying to attract foreign investment, which has slumped during four years of political unrest since the ouster of President Hosni Mubarak. The government is set to host investors at a conference starting March 13 to showcase changes implemented since army chief Abdel-Fattah El-Sisi was elected president last year. The reduction of fuel subsidies and devaluation of the pound since then have earned praise from the International Monetary Fund.