Egypt extends five percent supplementary tax to companies

June 10, 2014 - 12:00:00 am

CAIRO: Egypt extended a five percent supplementary tax to include companies as well as wealthy individuals, drawing a mixed response from businesses yesterday as it seeks ways to boost flagging state revenues under a new president.

Egypt’s outgoing interim government approved the tax last month on individuals who will earn more than one million Egyptian pounds ($140,000) a year over the next three years.

The official gazette — which records new laws and decrees — said late on Friday the tax would also be imposed on some companies, which officials had initially said were exempt.

Officials at the Financial Supervisory Authority were not available for comment on details.

But the regulator’s former chairman, Ashraf El Sharkawi, said corporations that earn less than 10m pounds annually would be taxed at 25 percent instead of the current 20 percent.  Firms making in excess of 10m would be taxed 30 percent instead of 25 percent.

Egypt is keen both to encourage investment and raise additional revenue after more than three years of economic and political turmoil since a popular uprising that ousted Hosni Mubarak in 2011 drove many tourists and investors away.

Ahmed Abou Hashema, chairman of mid-ranking steel firm Egyptian Steel, said the new tax needed to be offset by other more business-friendly measures.

“We must endure these next three years for the good of the country and social justice... (But) That must happen in tandem with creating new legislation to stimulate and encourage investment,” he said.