By Mahmoud Salah
Cairo – Mubasher: Egypt’s new value-added tax (VAT) will likely hike the average inflation rate by 1.3%, said finance minister Amr El-Garhy in a press conference on Tuesday.
The inflationary impact is forecast to gradually move from 0.5% to 2.3%, El-Garhy added according to a study by the Ministry of Finance, indicating that the bank of Egypt expected prices to increase by less than 1%.
Earlier, the former finance minister Hany Kadry Dimian (March 2014-16) said the VAT was expected to take prices higher by 2.5 to 3%.
El-Garhy has listed 52 commodities and services that will be exempted from the levy, most importantly including essential food goods, state education, natural gas, crude oil and raw materials.
The government targets to raise EGP 20-25 billion from the VAT law during the first quarter of the fiscal year 2016/17, if applied by the House of Reprensetitatives.On an annual basis, the new levy, which will replace sales tax, is to bring in EGP 30 billion revenues, according to earlier announcements by the ministry.
