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CAIRO – On April 6, 2025, Egypt’s Minister of Finance, Ahmed Kouchouk, unveiled a series of new tax incentives designed to support small businesses, entrepreneurs, and startups. The incentives, which include simplified tax registration and financial benefits, are aimed at boosting economic growth and expanding Egypt’s tax base.
Context & Background
In a meeting with the heads of investors’ associations at the Small Enterprises Union, Kouchouk revealed that the government is considering providing additional support for the first 50,000 taxpayers who register for the newly introduced simplified tax system. This system is part of a broader effort to make tax registration more accessible and efficient for small investors across the country.
The initiative is part of Egypt’s long-term strategy to encourage the growth of small and medium-sized enterprises (SMEs), which are seen as critical drivers of economic development. In recent years, Egypt has been working to improve its tax policies to foster entrepreneurship and create a more supportive environment for startups.
Economic & Compliance Impact
For small businesses, the introduction of this simplified tax system is expected to reduce bureaucratic hurdles, making it easier to establish and grow their operations. Entrepreneurs with annual revenues under 20 million EGP will benefit from nine key tax exemptions, creating significant savings for early-stage companies and startups.
The government has also pledged to provide financial support to businesses that register under this system, including access to financing and export opportunities. By expanding the tax base and improving access to resources, these incentives aim to create a more vibrant and competitive small business sector in Egypt.
For the economy at large, the reforms are expected to increase tax compliance and expand Egypt’s tax base, which has long been a challenge for the government. Encouraging voluntary compliance among small taxpayers is a central goal of the initiative, helping to stabilize the country’s fiscal position while simultaneously supporting economic growth.
Stakeholder Reactions
“This new tax incentive program is a game-changer for Egyptian startups,” said Mohamed Ali, an economic advisor at the Egyptian Chamber of Commerce. “It removes many of the barriers that previously discouraged entrepreneurs from formalizing their businesses. It’s a clear signal that the government is committed to creating an environment where small businesses can thrive.”
Kouchouk’s remarks were echoed by representatives from various industries who applauded the government’s focus on simplifying the tax process. “By partnering with the Small and Medium Enterprises Union, the government is ensuring that these measures will be effectively implemented, with real support reaching the businesses that need it most,” said Hossam Zaki, head of an Egyptian entrepreneurs’ network.
Next Steps / What to Watch
The implementation of this new system is expected to begin later in 2025, with registration for the simplified tax system opening for the first 50,000 businesses. The government plans to roll out further support packages for SMEs and startups over the coming years, which will likely include additional financial incentives and training programs to ensure businesses can take full advantage of the new tax benefits.
It will be important to monitor how quickly businesses take advantage of these new incentives and whether the tax base expansion can be sustained. Additionally, the partnership with the Small and Medium Enterprises Union will be crucial in ensuring the smooth rollout and continued success of the tax reforms.
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