Egypt near VAT implementation
- 28 October 2014 | Richard Asquith
Egypt has confirmed that it is closer to the publishing of a VAT implementation bill.
Consultations with the International Monetary Fund (IMF) are progressing well, and the hope is that a Bill could be introduced before the end of 2014.
Currently, Eygpt has a General Sales Tax of 10%. However, this has limited ability to reclaim input tax as goods and services move through the production chain. This means there is a high level of double taxation, and escalation of costs. This in turns disincentivises investment and may encourage black-market activity. It also means the country’s tax base is very narrow, largely dependent on corporate income and personal tax – which are both prone to volatile changes.
Last April, Egypt issued VAT implementation plans, but negotiations became bogged down over the summer.