Taxed with good intentions

Parliament last week approved a set of modifications to Income Tax Law 91/2005. The law sets rates and tax brackets for natural persons.

According to the Ministry of Finance, the aim of the modifications is to reduce the tax burdens on the lowest-income groups and redistribute them by creating a new segment for the highest-income earners.

The first bracket, on taxable earnings up to LE15,000, is exempt from taxes. The second bracket pays 2.5 per cent on earnings up to LE30,000, the following bracket 10 per cent for taxable income up to LE45,000, and the next 15 per cent on taxable income up to LE60,000.

The fifth bracket earning between LE60,000 and LE200,000 is taxed at 20 per cent. Those earning above LE200,000 pay 22.5 per cent. The modifications introduce a new tax bracket of 25 per cent for those earning above LE400,000.