By: Mostafa Adel

Cairo – Mubasher: The Egyptian Ministry of Finance (MoF) is planning to implement a tax credit system on companies as an alternative means to providing tax exemptions or reducing taxes on corporates, a ministry source said Thursday.

The new system will provide a partial tax exemption that will be calculated by deducting a certain percentage from the original cost or investment in a given tax year, the source, who asked not to be named because the information is private, told Mubasher.

The system will provide a tax exemption albeit indirectly, and will reduce the imposed tax burden, the source said.

The International Monetary Fund (IMF) expressed concerns about presenting tax exemptions that do not serve the government’s revenues, particularly as such exemptions have failed over the past several years, the source revealed.

Work is ongoing to finalise the new amendments and add them to the investment law and then present them before parliament for ratification, the source told Mubasher.

In December, the Egyptian parliament approved a new investment law, which aims to attract the largest portion of investments in the coming period. This comes in an attempt to bolster the slowing growth of the most populous Arab country.

Worth noting, the Egyptian government is targeting investments exceeding $10 billion in the current fiscal year.

Translated by: Nada Adel Sobhi