The most prominent amendments to income tax brackets in Egypt in 2022 and the best way to calculate them :-

"Taxes. Your interest first" is one of the terms that has always been associated with advertising campaigns for the work gain tax brackets, which shows the income tax brackets, and what the return from paying and deducting these percentages from our wages is. But over time and with the increase in the amendments to the income tax brackets, it has now become difficult to know the tax allocated to each category of wages, in addition to the emergence of some misconceptions that some repeat, which are completely untrue, and for this in this article, we explain the brackets of the work gain tax, and what are the amendments to the tax deduction laws, in addition to how to calculate the income tax with illustrative examples.

It is one of the multiple sources of national income, which is imposed in different proportions on the categories of people according to their income level annually, and this tax is imposed on individuals who work in government entities or commercial professions, and companies with capital that achieve an annual return, and an annual return is delivered to the Tax Authority clarifying the payment of all tax obligations, in order to prevent legal accountability.

Recently, a set of amendments to the payroll tax brackets appeared, as there were many tax brackets, and a new bracket entered the tax deduction group, to address the distortions and problems that began to surface in society, and made the principle of breach of tax justice common among the different classes of society.

The main purpose of amending the income tax brackets in Egypt "Amendments to Law No. 91 of 2005" was to achieve the principle of parity between the toiling groups and the high-level groups, so that the average citizen does not feel that he is paying a tax that exceeds what the rich classes pay, and for this the government began to make amendments that contribute to establishing the principle of tax justice, improve the payroll tax brackets, and make there a large space in the ceiling of the tax interest for the lower, middle and upper-middle income groups.

Talking about the amendments and changes introduced in the calculation and payment of payroll tax, we can say that the tax exemption limit has increased to 60%, and this means the introduction of new tax brackets for low- and middle-income earners, especially those whose net income ranges between 15 and 30 thousand pounds annually, in addition to reducing the tax payment limit for the category whose net income ranges from 30 to 45 thousand pounds from 15% to 10% only, and so on the rest of the larger categories.

The increase in the tax exemption limit was represented in the amendments to the income tax law from EGP 8,000 to EGP 15,000, in addition to increasing the personal exemption limit from EGP 7,000 to EGP 9,000.

Now let's get acquainted with the income tax brackets for this year after the new amendments and procedures that occurred in the different tax categories, and the income tax brackets for 2022 are as follows:

Income tax brackets in Egypt :

Many of us cannot calculate income tax, especially for those for whom mathematics was not their favorite at different educational levels, so it will be difficult for them to know the annual value due for taxes from their salaries, so we will learn together how to convert percentages in income tax brackets into actual value through some illustrative examples.

Let's first review how to calculate the percentage, in order to learn from it how to calculate the actual value of income tax brackets, and the percentage is calculated through a specific law based on the following:

Percentage = (Value / Total Value) X 100, for example, if you want to know the percentage of 15 outstanding students from a class of 50 students, you are on a date with a simple calculation based on the total of the operation of dividing 15 "value" by 50 "actual value" X 100, to be as follows: (15 / 50) X 100 = 30%.

Let's apply the previous example to some of the income tax brackets that we mentioned earlier, but this time we will calculate the value due for taxes instead of calculating the percentage, through the following equation:

Value = (actual value x percentage) / 100, for example, if we want to know the value payable for the second tranche whose net income ranges from 15k to 30k, the amount payable is (15,000 x 2.5) / 100 = 375 pounds, and if the maximum income reaches 30,000 pounds, the amount payable is (30,000 x 2.5) / 100 = 750 pounds.

Another illustrative example of one of the income tax brackets, if the net profit is 45 thousand pounds, i.e. within the fourth bracket, the amount payable for taxes is equivalent to (45,000 x 15) / 100 = 6,750 pounds.

Perhaps some are now wondering about the possibility of an individual or an institution taking over the task of dealing with the Tax Authority, and providing all legal advice related to this matter, and we do not hide you a secret, my dear, you will not find better than the Egyptian Certified Public Accountants Company "ECPA" to take over this matter.

Income tax brackets are not the only type of taxes, there are different types that you are dealing with, and you will need experienced and competent people to manage these matters, especially since it is an issue that cannot be underestimated, and may expose you to legal accountability, and the most important feature of "ECPA" is its ability to assume tax tasks and financial accounts without involving you in its complex details, and examples of services it provides are the following:

Tax and accounting consultancy, and submission of annual tax returns.

Settlement of annual taxes on wages and salaries.

Provide a comprehensive report of the company's profits and all related tax liabilities.

Negotiate with the IRS and solve various tax problems.

To summarize the above, it can be said that the income tax brackets have undergone many changes, which led to the emergence of a new segment, the 2.5% segment, and the decrease in the value due to some segments, in order to achieve equality and tax justice between the different segments of society.

Frequently asked questions

Who is exempt from income tax?

Workers in the self-employment and craft industries.

Are allowances subject to income tax?

Yes, allowances granted by companies to their employees are included in the income tax rate.

What is the difference between income tax and VAT?

Income tax is an annual amount of money that is levied at different rates on individuals and businesses, while VAT is a consumption tax levied on products.

Can the installment policy be followed in paying income tax?

Income tax was paid in installments after the Corona pandemic to reduce the burden and reduce material losses on the !

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