Head of the Egyptian tax authority Ashraf al Araby has announced that the tax authority has concluded the draft project for simplified accounting for taxpayers involved in small projects and will be l...

Head of the Egyptian tax authority Ashraf al Araby has announced that the tax authority has concluded the draft project for simplified accounting for taxpayers involved in small projects and will be launched in 2008. The announcement came during a symposium organized by the Egyptian tax society in the presence of 500 accountants and tax experts. Al Araby noted that the most important features of the new system is calculating taxes on small enterprises and offering two means to apply simplified accounting methods.  In the first method an estimate of taxpayer’s revenues are calculated in accordance with operable capital of which determined expenditures are deducted in return for revenue and after deducting family expenditures.  The system is known as defined expenditure system whereby an estimate of taxpayer’s expenditure over the fiscal year is calculated, losses are deducted and the surplus is added over the next fiscal years. In the second system which is known as deducted costs at defined estimates and in which the taxpayer is informed of the amount of tax to be paid at the end of the fiscal year. Head of the tax authority explained that the feature of the project calls for a set date for payment of tax at the end of the fiscal year or through quarterly or semi annual installments.  The chief noted that the taxpayers for small enterprises will be exempt from sales tax or value added tax.‏ He noted that the delay in launching the project has been due to a number of obstacles related to defining micro projects which are benefiting from the project and which have been found to be businesses with capital set at 500,000 pounds while small projects have been defined as those with capital set at one million pounds with 100 employees or more.  According to the definition, most companies will be regarded as small enterprises. (source :Al-ahram)