Cairo – Mubasher: Egypt started working by the value-added tax (VAT) on Friday, after it has been published in the official gazette on 7 September, Egypt's Ministry of Finance said.
The Egyptian president Abdel-Fattah El-Sisi approved the VAT law after the parliament’s approval last week.
The VAT law replaced the sales tax law; it is levied on the difference between the cost and sale prices for local and imported goods. It will be paid by consumers.
The parliament passed the VAT rate at 13% rather than the 14% rate recommended by the government, but it will rise to 14% in the upcoming fiscal year.
The government is likely to raise EGP 32 billion from the VAT law, the Deputy Finance Minister Amr Al-Mounir said earlier.
The VAT’s 13% rate and the higher number of exempted goods and services will result in a revenue shortfall ranges between EGP 12 billion and EGP 20 billion.
The law includes a three-month transition period to give the companies and the registered on the tax a chance to understand it, without imposing any delay penalties, according to the finance ministry.
The new tax law came among the reform measures adopted by the Egyptian government that includes raising the electricity prices and gradually reducing the power subsidy.
