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Egypt planning major overhaul of VAT law

Egypt will form a committee to amend its value-added tax law, Finance Minister Mohamed Maait told reporters on Monday, without specifying what the changes may be.

The VAT law is part of a reform program that formed the basis of a $12 billion, three-year loan agreed with the International Monetary Fund in 2016.

It replaced a sales tax and broadened the tax base in a country where the government struggles to collect income tax because of a large informal economy and widespread avoidance.

Maait said the government collected 660 billion Egyptian pounds ($39.83 billion) in taxes in the 2018-2019 financial year, up 16.6% from the previous year at 566 billion Egyptian pounds.

Of total tax revenue collected in the 2018-2019 financial year, 309 billion Egyptian pounds came from VAT, the minister said.

The VAT, currently at 14%, is a composite tax levied on the difference between the cost price and the sale price of domestic and imported goods.

Source: Reuters

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