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Egypt VAT reform earns credit upgrade

  • Dec 29, 2014 | Richard Asquith

Egypt VAT reform earns credit upgrade

Egypt's proposed VAT implementation has contributed to a credit upgrade from on the the leading global resting agencies, Fitch

Egypt plans VAT implementation

Egypt currently has a simple 10% sales tax.  Aside from being applied to only a narrow base of products, which makes the revenue unstable, it also has limited scope for recovery for companies which suffer any of the tax.  This can lead to double taxation.  It has been estimated by the International Monetary Fund that replacing the Sales Tax with a fully reclaimable VAT regime could add over 1% to the country's GDP.

Fitch has included plans to introduce VAT in Egypt in its latest upgrade of the country's currency bonds (debt).  The agency sees this type of reform to the economy's structure will put it on a strong footing for competition for global manufacturers looking to locate their regional workforces.  One of Egypt's key competitors, Turkey, already operates an 18% VAT rate regime.

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.