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Egypt's finance ministry reveals VAT-free goods and services

Ahram Online , Friday 20 May 2016
Egypt
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Views: 4073

Egypt's finance ministry has listed 52 commodities and services that will be exempted from a new value-added tax (VAT), which is expected to be applied this year after it is approved by parliament.

According to a ministry statement emailed to press on Friday, the exemption list will include all essential food goods and dairy products, in addition to babies’ milk and their nutritional supplements.

Foods that are sold to consumers through shops and restaurants without touristic licences will also be free of VAT, the statement said.

The long-delayed levy, which has recently been approved by the cabinet, is set at a flat rate of 10 percent. The government aims to avoid tax evasion by applying it to each member on the chain of production of goods and services, including the final retail stage, in place of the current sales tax which is imposed only on the final sale to the customers.

Imposing VAT would have a one-time impact on prices of all goods excluding food, raising them by between 0.5 and 2.5 percent, the ministry has said in previous statements.

Crude, natural gas, butane, raw materials extracted from quarries and mines, electricity, mineral water, prosthetic body parts and paper are among the tax-exempted commodities.

Services that are exempt include banking operations and financial transactions under the state’s financial watchdog EFSA such as leasing.

The ministry added that the exempted services will also include education, scientific research and services provided by religious and cultural establishments.

Egypt's government hopes to raise tax revenues by around EGP30 billion upon implementation of the new tax.
 

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Tut
21-05-2016 04:38am
0-
1+
Tourism Tax
with 52 exemptions, including basically most consumer products and services; what is left are only items related to tourism and industry. In a time when tourism is in a coma why beat it up even more? The way this VAT issue evolved has shown that very little planning went into it; sure the government's wish was to apply it to as many products and services as possible. However with government approval rating is declining faster than the Egyptian Pound the government kept adding more items to the exemption list, to the point of defeating the purpose of having a VAT but a Tourism tax!
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