Specific Business Tax Exemption for SMEs as Approved by the Cabinet
Small and medium-sized enterprises (SMEs) are businesses that are typically smaller in size compared to large enterprises. SMEs are an important part of many economies, as they often contribute significantly to job creation and economic growth.
Specific Business Tax (SBT) is another kind of indirect tax introduced in 1992. Certain businesses that are excluded from VAT will instead be subject to SBT.
One of the functions of the Office of SMEs Promotion (OSMEP) is to help SMEs that have potential to grow but hardly have access to the source of investment funds. However, granting loans to SMEs in that fashion is subject to an SBT of 3%. Exemption of SBT in this kind of transaction will in turn help SMEs. As such, the Cabinet has approved an exemption of SBT to loans granted by OSMEP to SMEs under the OSMEP funds. The SBT is exempt from the day the project realized the interest, which was on 1 September 2020.