Egypt's VAT set at 14pct, to be discussed in parliament

[DJKeefy]

Egypt's value added tax set at 14pct, to be discussed in parliament.

The rate of Egypt’s long-delayed Value-added tax (VAT) has been set at 14 percent instead of the previous rate of 10 percent as parliament iis set to discuss the new law, finance minister said on Tuesday.
The VAT was previously set at a flat rate of 10 percent, according to the country's Sustainable Development Strategy for 2030 website launched in February.

Minister Amr El-Garhy said at a Cairo press conference that the average rate of VAT globally is set between 15 percent to 18 percent.

“The VAT is considered as a consumer tax, which means who consumes a lot will pay more,” El-Garhy said.

The minister said that VAT may lead to price inflation ranging between 0.5 percent for low-income Egyptians and up to 2.3 percent for the upper class.

The ministry listed in May 52 commodities and services that will be exempted from VAT including all essential food goods and dairy products, in addition to baby formula and their nutritional supplements.

However, El-Garhy denied that VAT will cause fuel price hikes or put additional tax on cars as reported, confirming that the new levy will replace the currently applied sales tax. He added that production direct and indirect inputs will be deducted from the new tax bill.

According to Amr El-Mounir, the minister’s deputy for tax policies said that some commodities will see higher cost such as alcohol and molasses.

“We are still discussing prices of cigarettes and tobacco with companies to reach a compromise,” El-Garhy said.

Egypt's government hopes to raise tax revenues by around EGP 25-30 billion upon the implementation of the new tax.


Source: http://english.ahram.org.eg/News/233609.aspx

[Major Thom]

A world of good for poverty.

[Dusak]

I just wish that they would make it public knowledge that it has not been implemented yet. Lost count of how many items over the last four months or so have increased ''due to the new tax.'' And when they do implement it, given the increases some shops are placing on items now, they will be charging far higher than the proposed 14%. Its not just the likes of me that are being overcharged, but now a common problem for the Egyptian shopper, especially in the pharmacy's.

[Major Thom]

By not announcing it publicly it thought it will reflect the increase and the cost will not fall back on Parliament. Like a UK MP once said, "Nothing to do with me" it's noticeable however that people are now starting to become very aware of these increases and they are becoming topics of general conversation.