Egypt has taken a big step to ease the tax burden on small and micro-enterprises by making its simplified tax system a permanent feature of the country’s business environment. The Head of the Egyptian Tax Authority (ETA), Rasha Abdel Aal, announced that the new rules under Law No. 6 of 2025 will now form a lasting part of the government’s plan to support small enterprises, boost formalisation, and help businesses grow with confidence.
The law applies to businesses with annual revenues not exceeding EGP 20 million. Abdel Aal explained that the main goal is to simplify tax procedures and create a more investment-friendly climate for entrepreneurs. By removing unnecessary complications, the system aims to allow small businesses to focus more on production, sales, and expansion, rather than spending too much time and resources on tax paperwork.
The new tax arrangement offers a graduated rate structure. Enterprises making less than EGP 500,000 per year will pay a tax rate of just 0.4%, while those with revenues up to EGP 20 million will be taxed at 1.5%. Abdel Aal stressed that this approach makes tax obligations predictable and manageable for small business owners.
In addition to low tax rates, the law comes with a series of exemptions designed to reduce operational costs. Businesses enrolled in the simplified system will not face tax audits for five years from their registration date. They will also be exempt from capital gains tax on the sale of fixed assets, dividend tax, state resource development fees, stamp duty, and registration and notarisation fees for incorporation contracts or business-related land documents.
The system also removes the need for withholding or advance payment of income tax. VAT returns, which previously had to be filed monthly, will now be submitted quarterly, reducing administrative stress. Payroll tax returns will be filed only once a year, and the law eliminates the need for complicated accounting records and lengthy financial reports.
To further support small businesses, the ETA will provide free technical and technological assistance. This includes supplying point-of-sale devices, integrating enterprises into the authority’s electronic tax system, and offering continuous consultancy services. Abdel Aal said that these measures will ensure that small businesses can operate efficiently, remain compliant, and take full advantage of available incentives.
The ETA also plans to carry out awareness campaigns to educate the business community about the benefits of the simplified tax system. Abdel Aal noted that stability and predictability in taxation encourage entrepreneurs to expand their operations, hire more workers, and contribute more to the economy.
Business experts believe that by removing heavy compliance demands, the simplified tax system will encourage more small and micro-enterprises to register formally with the state, which in turn will increase transparency and broaden the tax base. It also aligns with Egypt’s economic reform agenda, which focuses on strengthening the private sector as a driver of growth and job creation.
For many small business owners in Egypt, these changes could be a turning point. Lower rates, reduced paperwork, and long-term certainty in taxation can mean the difference between struggling to survive and planning confidently for the future. The government’s decision to make the system permanent sends a strong message that it is committed to creating an environment where small enterprises can thrive.
The new measures come at a time when small businesses are increasingly recognized as a key part of Egypt’s economy. They not only provide goods and services but also create jobs for a large portion of the population. With the simplified tax system now firmly in place, many in the business community are optimistic that it will serve as a foundation for greater innovation, competitiveness, and sustainable growth in the years ahead.
