TAX INCENTIVES AND THEIR IMPACT ON FOREIGN DIRECT INVESTMENT DECISIONS IN EGYPT

Document Type : Original Article

Authors

1 Faculty of Graduate Studies and Environmental Research, Ain Shams University

2 Faculty of Commerce,, Ain Shams University

3 Sadat Academy for Management Sciences

4 Modern University for Technology and Information

Abstract

The study aimed to examine the extent to which tax incentives influence foreign direct investment (FDI) decisions in Egypt, and to analyze the legal and regulatory framework governing these incentives, as well as their alignment with international standards that promote FDI. It also sought to assess the impact of each type of incentive on investors’ decisions across different economic sectors. The study employed a descriptive analytical approach and targeted a purposive sample of experts and specialists in the fields of economics, taxation, and investment. An online questionnaire was distributed to collect data. The results revealed a statistically significant positive relationship between tax incentives and FDI decisions, as well as a significant relationship between the legal and regulatory dimension of the incentives and those decisions. The study concluded with a set of recommendations, the most important of which is the need for a comprehensive and periodic review of the existing tax incentive system to ensure its alignment with both local and global economic developments, regional competition standards, and the needs of foreign investors. This review should be carried out in coordination between the relevant tax and investment authorities. Additionally, the study recommends the preparation and publication of an official unified guide that includes all available tax incentives, categorized by sector, geographic location, and type of activity, with a clear explanation of related conditions and procedures, to enhance transparency and facilitate investor decision-making.
 

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