Wednesday 13 May 2020
The Minister of Finance, Mohamed Moit, said that the new tax system for income from salaries and the like will be implemented as of the beginning of next July, after amending some provisions of the “Income Tax” law issued by Law No. 26 of 2020.
The minister added in a statement today, Wednesday, following the issuance of the law, that the new system applies to the income generated from commercial and industrial activity or the income of non-commercial professions, or real estate wealth revenues starting from the tax period that ends after the date of the law’s entry into force.
He stated that the new amendments reflect the government’s implementation of presidential mandates to achieve tax justice progressively, and improve tax brackets for the benefit of the largest part of society and service to the middle class, in a manner that contributes to raising the standard of living of citizens.
The minister pointed out that the income tax on individuals under the new amendments will be a progressive, fair, and achieve tax savings for the lower, middle and upper middle classes, and it addresses the distortions of the current system based on “tax deduction”.
He explained that the new amendments include increasing the tax exemption limit by 60%, as the basic exemption limit for each financier has been raised from 8 thousand pounds to 15 thousand pounds, in addition to increasing the personal exemption limit for salaries from 7 to 9 thousand pounds, and therefore the annual income will be for those with Salaries up to 24 thousand pounds are tax-free.
The minister said that, according to these amendments, a new social segment was created for low-income people whose annual net income ranges from 15 to 30 thousand pounds, other than the personal exemption limit, so that the tax is 2.5%.
He added that the tax on the slide from more than 30 thousand pounds to 45 thousand pounds will be 10% instead of 15%, and the tax on the slide more than 45 thousand pounds until 60 thousand pounds will be 15% instead of 20%.
The minister stated that the tax on the bracket more than 60 thousand pounds until 200 thousand pounds will be 20% instead of 22.5%, and on the bracket more than 200 thousand pounds and up to 400 thousand pounds 22.5%, and the creation of a new segment at a price of 25% for people with higher incomes than that.