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Egypt VAT Bill imminent

  • Sep 14, 2015 | Richard Asquith

Egypt VAT Bill imminent

Egypt is expected to issue a Bill for the implementation of VAT by October.

Value Added Tax will replace the existing Sales Tax regime, which is currently levied at 10% for most supplies. There is limited opportunity to recover any Sales Tax incurred by manufacturers through he production chain, which is a major disinvestment to the sector. Egypt is keen to replicate the successes and plans of rival emerging economies such as Turkey, China and India.

A VAT rate of 10% would raise up to $5 billion per annum. However, it may lead to a one-off inflation rise of between 2% and 3%.

The introduction of VAT is seen as vital by the World Bank to help Egypt reduce subsidies on electricity and a high government deficit. A more simple, and fairer VAT regime would also encourage more compliance, and help reduce the ‘black market’, estimated by at 30% of GDP.

VP Global Indirect Tax
Richard Asquith
VP Global Indirect Tax Richard Asquith
Richard Asquith is VP Global Indirect Tax at Avalara, helping businesses understand their compliance obligations as they grow globally. He is part of the European leadership team which won International Tax Review's 2020 Tax Technology Firm of the Year. Richard trained as an accountant with KPMG in the UK, and went on to work in Hungary, Russia and France with EY.