Egypt's President Abdel-Fattah El-Sisi has ratified the long-delayed value-added tax (VAT).

The Ministry of Finance will issue its bylaws for the new legislation within 30 days, according to the govrernment's official gazette.

According to Article 9 of the VAT law, which Ahram Online obtained a copy of, the current sales tax law will continue to be applied until the new VAT bylaws are issued.

Egypt’s parliament gave a final approval on August 28 to the implementation of the VAT at a rate of 13 percent for the 2016/17 fiscal year, to rise to 14 percent the following year.

The long awaited VAT law is part of the government's fiscal reform programme, implemented in July 2014, through which energy subsidies are being cut and new taxes are being introduced to reduce the country's ballooning budget deficit – estimated at 11.5 percent of GDP in fiscal year 2015/16.

The VAT aims at reducing tax evasion, as it will be applied to each member of the production chain of goods and services, instead of the current sales tax that is imposed as a one-off on the final sale to customers.

The parliament also increased the list of exempted goods and services to 56 from 52 items; it includes local and imported medicine.

“The VAT is regarded as a consumer tax, which means those who consume a lot will pay more,” El-Garhy said earlier.

The minister said in July that the 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 government reform programme, which the VAT is part of, has been endorsed by the International Monetary Fund (IMF), leading to an initial agreement between the government and the global lender on a $12 billion fund facility over three years, which is expected to be approved by the fund's executive board in the coming weeks.

Egypt, which relies heavily on imports, particularly of foodstuffs, has been suffering a severe shortage of US dollars in the wake of political and security unrest that has scared off tourists and foreign investors, two major sources of hard currency.