Rasha Abdel Aal, Head of the Egyptian Tax Authority, announced that the second package of tax facilitation measures includes a series of significant legislative amendments aimed at supporting economic activity while simplifying the tax system. These measures come in line with the directives of Minister of Finance Ahmed Kouchouk to expand tax incentives and provide greater support to key economic sectors.
Abdel Aal explained that the package introduces amendments to the Value Added Tax (VAT) Law, under which medical devices will be subject to a reduced VAT rate of 5% instead of the standard 14%. In addition, inputs, components, and supplies used in kidney dialysis equipment and kidney filters will be fully exempt from VAT. These measures are intended to support the healthcare sector, ease the financial burden on citizens, and encourage local manufacturing and production.
She added that the package allows for an extension of the suspension period for VAT payment on machinery, equipment, and medical devices used in industrial production. The total suspension period may now reach up to four years, subject to valid reasons and justifications accepted by the Egyptian Tax Authority.
The package also provides for the exemption of services rendered on goods in transit from VAT, provided that transportation is carried out under the supervision of the Customs Authority and in accordance with the provisions of the Customs Law. This measure aims to support and stimulate transit trade through the country.
Abdel Aal further noted that soap and industrial detergents for household use are now subject to the standard VAT rate of 14%, enabling taxpayers to deduct all related production inputs. This step aligns with international best practices and reflects the Authority’s commitment to achieving tax neutrality and fairness.
