A new tax law was signed by the Egyptian president on 21 May 2013. The new tax law cuts the amount of tax paid by those on lower incomes and this is intended to improve their living conditions.
According to the new law anyone who earns EGP 5,000 or less a year ($716) will be exempt from paying income tax.
The law also takes into consideration everyday expenses, allowing up to EGP 7,000 ($1,000) in tax deductions. If the tax exempt amount and the tax deductions are both taken into account this technically expands the exemption from income tax to include those who earn salaries up to EGP 12,000 ($1,700) a year.
The new tax law also expands the second, third and fourth tier tax brackets, lowering taxes by around five percent on a range of annual incomes up to EGP 250,000 ($35,000).
In another measure companies earning EGP 10 million ($1.4 million) or less a year will be liable to pay a tax rate of 25% (previously 20%). All companies are therefore effectively paying corporate income tax at a unified rate of 25%.
