New Wealth Tax in Egypt
June 6, 2014 Taxation in Egypt
CAIRO – The wealthiest individuals in Egypt are set to pay a new tax, but will be given some option on what the government will use the newly collected revenues.
On June 5th the government of Egypt enacted a new tax at a rate of 5 percent on the incomes of individuals and entities earning in excess of EGP 1 million per year, according to new information released by the state news agency MENA.
The new tax is only temporary, and will only be applied for a period of three years, in which time it is expected to help raise tax revenues by as much as EGP 3 billion.
Any entities or individuals subject to the tax will be asked what sort of infrastructure development they would like to see their extra tax revenues diverted, including health projects, education or housing.
The new tax should help ease the current financial pressure exerted on the government by the rising national deficit, which reached 14 percent of GDP last year.
Under current regulations, the top marginal tax rate faced by individuals was EGP 25 percent, on incomes exceeding EGP 250 000 per year, and this new tax is intended to address the issue of income equality, a topic which has been prominent in Egypt over the last three years.
Photo by: Ahmad Hammoud