A Tax System for Micro, Small and Medium Enterprises (M/SMEs) in Egypt
The tax system in Egypt has passed through several phases since it started with law 14/1939 and continues with following laws. Along this period, successive laws were enacted to provide remedies to occurring drawbacks.
Notwithstanding, the Egyptian tax legislator didn’t specify special treatment for small and micro enterprises in spite of the importance of these types of enterprises and their impact on the development of national economy.
Different countries that are seeking to achieve (or have achieved) economic breakthrough – for example France, Canada, UK, Russia, Ukraine, Bulgaria and Latvia – have recognized the impact and importance of developing a specialized tax treatment for M/SMEs.
At the time of the study, the Egyptian government was in the process of issuing a new modernized tax law that would help the country to achieve its economical and social objectives. Encouraging Micro, Small and Medium Enterprises (M/SME) is one of the main objectives of Egyptian government. Accordingly, the new tax law was designed to provide a preferable treatment to M/SMEs.
This study described different tax models and features adopted by countries worldwide for the purpose of providing tax incentives to M/SMEs. The international experience of applying these models was presented and different models were analyzed and compared.
A complete tax system to support M/SME was also presented providing a customized Tax Model for each category of enterprises: Micro, Small and Medium. The application of each model was presented with features and examples.