A New Era for Egypt: Simplified Tax Systems, Green Finance, and Investment Confidence

• Egypt advances toward a simplified, business-friendly tax environment for SMEs.

• Integrated digital systems and AI-enabled platforms reduce compliance burdens and enhance transparency.

• New 2026 tax facilitation packages are set to reshape Egypt’s digital and investment landscape.

• Green finance, sustainable growth, and rising international investment reinforce economic stability.

1. A Transformational Shift in Egypt’s SME Tax Framework

Egypt continues to implement major tax reforms supporting businesses with annual revenues up to EGP20 million, the new SME system delivers simplified proportional tax rates, reduced reporting burdens, and a fully digital enrollment and filing experience.

Key Features of the New SME System

• Proportional income tax starting from 0.4% and capped at 1.5%

• One simplified income tax return annually

• Quarterly VAT submissions instead of monthly

• Unified digital application through the online tax platform

• Five-year stability period with no tax audit before the fifth year

• Exemptions from several administrative taxes and fees

These reforms strengthen Egypt’s direction toward easier compliance and stronger entrepreneurial growth, especially for start-ups, freelancers, e-commerce operators, educational platforms, content creators, and independent professionals.

2. Strengthening Digital Transformation & Support Services

Egypt is accelerating its transition to a unified digital tax ecosystem supported by AI-ready systems, improved cybersecurity, and upgraded communication channels.

Tax offices and support centers have extended working hours and dedicated specialized teams to help with:

• Activation of electronic tax systems

• Migration to the new digital business platform

• Filing support and technical assistance

Taxpayers now benefit from faster processing, improved technical support, and smoother compliance across digital channels.

3. Accelerated Economic Growth & Investor Confidence

Recent indicators point to strong momentum in private-sector activity, export readiness, and investment inflows. Egypt’s financial strategy focuses on:

• Strengthening medium-term fiscal frameworks

• Enhancing tax competitiveness and long-term stability

• Expanding infrastructure financing, particularly in green and climate-aligned sectors

• Deploying green-finance tools to support economic resilience

• Advancing public–private partnerships across renewable energy, desalination, transport, and waste management

These priorities reinforce Egypt’s standing as a growing regional investment hub and elevate international confidence in the country’s economic direction.

4. Preparing for the Second Package of Tax Facilities

After the positive outcomes of the first facilitation package, which boosted voluntary compliance and reduced administrative friction, the second package is expected to introduce:

• Faster VAT refund mechanisms

• Stronger support programs for compliant businesses

• Enhanced coordination between tax and economic bodies

• Wider community engagement and educational campaigns

This next phase reflects Egypt’s commitment to a transparent, fair, and business-focused tax environment.

Kozman & Co. “Your Trusted Tax Partner in a Changing Digital Landscape”

For over five decades, Kozman & Co. has been a leading force in Egypt’s audit and tax consulting sector, businesses rely on our expertise to navigate tax reforms with clarity, precision, and strategic foresight.

Our Core Tax Services:

Tax Advisory – Local & International

Expert support on tax structuring, investment planning, and tax-efficient business models.

Retainer advisory packages available.

Tax Due Diligence

Full tax-risk assessments for mergers, acquisitions, and corporate transactions.

Tax Inspection & Dispute Resolution

Representation before tax authorities and committees, managing defense files and escalation processes.

Transfer Pricing Services

Preparation of Master File, Local File, and CBCR in full compliance with Egyptian TP regulations.

Corporate Income Tax (CIT)

Preparation, review, and submission of corporate tax returns, including support for SMEs under the new regime.

Comprehensive Tax Compliance

Management of VAT, WHT, payroll taxes, dividends tax, capital gains tax, and all statutory filings.