·         All public and private sector employees will benefit from the said law.

·         Adopted tax deduction technique shall ease taxation burden on taxpayers of monthly income equaling 2500 EGP, from 183 EGP down to merely 27.5 EGP.

Egyptian Tax Authority is set to issue a circular on procedures of implementing the law related to increasing limits of tax exemption rates in order to lighten tax burdens sustained by citizens.  As many as 5.5 million public sector employees as well as 2.5 million  private sector workers shall benefit from the new lower deduction rates.

 Finance minister, Dr. Mohammed Maait, announces that starting from current July, the Ministry of Finance shall start applying the new law  and increase tax  deduction and exemption limits from 7200 EGP up to 8000, pointing out that such  privileges will cost the State Public Treasury  4 billion EGP per year.

The new exemptions shall boost individual purchase power, notes the minister,  illustrating that since  income tax is paid on a monthly basis despite being categorized as an annual tax,  any exemptions thereof are manifested immediately in the monthly deducted tax.

 Raising tax exemption limits comes in response to directions of President Al-Sisi to increase incomes of Egyptian households and low-income classes in a way to mitigate negative effects of economic reforms. Indeed, such increases in tax deduction and exemption rates are planned to be effected in synchronization with  the scheduled  increases in salaries and pensions as of July 2018.

 On his part, Mr. Emad Sami, Head of the Egyptian Tax Authority, notes that tax deduction limits shall increase in the new fiscal year as such:  from 80% up to 85% for the second tax category ranging between EGP 8 to 30 thousands, from 40 to 45% for the 3^rd tax category (EGP 30 to 45 thousands), and from 5% to 7.5% for the 4^th tax category (EGP 45 to 200 thousand).  Tax cuts are to be executed  once as per the highest tax category.

 The relevant circular will enclose examples of tax deduction calculation methods for the said three tax categories so as to guarantee unified tax procedures across the nation. Provided also therein are answers to any inquires or complaints submitted over the last period while putting in practice the new tax deduction techniques, that were approved for the first time mid of last year.

 In this respect, Mr. Said Ahmed Fouad, head of the central administration of technical office of  Head of the Egyptian Tax Authority,  gives an example for how citizens will benefit from the new tax deduction technique. Namely an employee  getting a monthly net salary of 2500 EGP (30 thousands EGP per year) used to pay a deducted tax worth 2200 EGP annually (183.3 per month) ; while after the applying the new 85% deduction limit, the deducted tax will shrink to 330 EGP annually (27.5 per month),  thus, affecting an increase in his monthly salary by 155.5 EGP per month.

 The higher income employees get, the lesser benefit shall they get from the new tax deduction techniques, notes Mr. Said, pointing out that it is mainly oriented to the most vulnerable categories. An employee receiving a net monthly salary of 4 thousands used to pay 4500 EGP annually, while after the new 45% deduction limit for relevant tax category, the deducted tax will reach 2475 EGP annually, by only 206 EGP per month, Mr. Said illustrates further.