At a high-level policy forum on 25 May, Finance Minister Ahmed Kouchouk declared that Egypt is beginning to reap the rewards of its structural reform program, pointing to ten months of strong macroeconomic and financial indicators.
Speaking at the 2025 U.S.-Egypt Policy Leaders Forum, hosted by the American Chamber of Commerce and chaired by Tarek Tawfik, Kouchouk emphasized that broad alignment across government and the private sector is driving long-term economic competitiveness, a core objective of the country’s ongoing reform agenda.
As of late 2024, reform measures have begun, as Kouchouk unveiled a comprehensive package of new tax incentives in late 2024, aimed at strengthening trust and deepening collaboration between the government, the private sector, and potential investors, signaling the country’s continued commitment to economic reform and growth.
These measures focus primarily on small and medium enterprises (SMEs), startups, and informal businesses, with the goal of simplifying tax compliance, reducing financial burdens, and encouraging formalization of the economy.
The new tax facilitation package is anchored by Law No. 6 of 2025, which introduces a range of tax benefits for enterprises with annual turnover not exceeding EGP 20 million (USD 401,935). Key features include exemptions from state development fees, stamp tax, capital gains tax on asset sales, and withholding tax on dividends. Additionally, corporate income tax rates for companies with turnovers between EGP 500,000 (USD 10,048) and EGP 20 million (USD 401,935) are reduced to a range of 0.4 percent to 1.5 percent, significantly easing tax liabilities for small businesses.
Beyond tax rate reductions, the government has streamlined tax procedures to enhance compliance and reduce administrative burdens. Eligible businesses benefit from simplified bookkeeping rules, quarterly rather than monthly VAT returns, and a single annual salary tax return.
The first tax inspection for these businesses will occur five years after registration, providing a longer period of stability and predictability. To qualify for these incentives, businesses must submit a formal request to the tax authority and commit to the program for at least five years, ensuring sustained partnership and transparency.
The incentives also include measures to integrate informal economy projects into the formal tax system by allowing unregistered taxpayers to register without owing past liabilities, encouraging voluntary compliance.
Penalties for late tax payments are capped at the original tax amount, reducing financial strain on businesses facing disputes or delays. Moreover, companies can amend or submit tax declarations from 2020 to 2023 without penalties, fostering a cooperative relationship between taxpayers and the state.
As Egypt begins to see tangible gains from its structural reform efforts, including reaching the highest primary surplus in recent history, at 3.1 percent of gross domestic product (GDP) from July 2024 to April 2025, Kouchouk stated, “The Egyptian economy is now positioned for gradual and sustained growth.”
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