Egypt approves VAT bill
- May 16, 2016 | Richard Asquith
The Egyptian cabinet this week approved a revised bill for the implementation of VAT and the withdrawal of the existing 10% General Sales Tax. The previous bill had been rejected by Parliament.
The latest bill will now be sent to the State Council for review, and then resubmitted to Parliament.
The introduction of a Value Added Tax regime is seen as an important fiscal reform to help encourage the development of a vibrant manufacturing economy. Its implementation has been linked to the latest round of funding from the International Monetary Fund.
The current tax regime is complex, and often leads to compounding tax as there is no effective offset regime on sales tax incurred by businesses during the manufacturing chain. VAT should also encourage the outsourcing industry. The new VAT system will also widen the existing tax regime.