Minister of Finance: the new tax system will apply to wages from July

Dr. Mohamed Moait, Minister of Finance, confirmed that the amendments to some provisions of the “Income Tax” law issued in Act No. 26 of 2020 reflect the government’s implementation of presidential mandates to achieve fiscal justice progressively and improve the fiscal tranches in favor of most of society and the service of the middle class, as it contributes to raising the standard of living of citizens.

After the issuance of a law that modifies some provisions of the “Income Tax”, the Minister added that the new tax system for salary income and the like will be implemented from next July 1, and will apply to the income generated for the commercial and industrial activity or the income of non-commercial professions, or patrimonial income. Real estate, from the tax period that ends after the date the law became effective.

He pointed out that the personal income tax, in light of the new amendments, will be progressive, fair and will achieve tax savings for the lower, middle and upper middle classes, and addresses the distortions of the current system that focuses on ” tax deduction “and includes an increase in the tax exemption limit by 60%, where the basic exemption limit for each financier has been raised from £ 8,000 to £ 15,000, in addition to increasing the personal exemption limit for Wage earners from £ 7,000 to £ 9,000, and therefore the annual income of those with wages of up to £ 24,000 will be exempt from tax.

Moait said that, according to these amendments, a new social segment was created for those with low incomes whose annual net income ranges from £ 15 to £ 30,000, apart from the personal exemption limit, so that the tax on them would be 2.5%, and from more than 30 thousand pounds to 45 thousand pounds You will be 10% instead of 15%, and more than 45 thousand pounds to 60 thousand pounds, it will be 15% instead of 20%, and more than 60 thousand pounds to 200 thousand pounds, it will be 20% instead of 22.5%, and more than 200 thousand pounds and even 400 thousand pounds, 22.5%, and the creation of a new segment, at a price of 25%, for those with higher incomes.