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Egypt's Lawyers Syndicate challenges VAT law in court

El-Sayed Gamal El-Din , Monday 3 Oct 2016
Sameh Ashour
File photo of Lawyers' Syndicate head Sameh Ashour. (Photo: Al-Ahram)
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The head of Egypt's Lawyers Syndicate Sameh Ashour filed on Sunday a case challenging the newly ratified Value Added Tax (VAT) law in Administrative Court, demanding its repeal.

The case comes two days after dozens of lawyers held a protest against the new law in front of the Court of Cassation in downtown Cairo and in a number of other governorates.

The VAT law came into force early September shortly after Egyptian President Abdel-Fattah El-Sisi ratified it and after the parliament approved it at a rate of 13 percent for the 2016/17 fiscal year, to be raised to 14 percent the following year.

Under the VAT, lawyers are to be subjected to a 10 percent tax as their job is considered "professional and consultative services."

After the syndicate general board meeting on Saturday, Ashour said that work as a lawyer is characterised as a “free profession” – as in it has no stable income and is not tied to a specific institution – according to Article 198 of the constitution, and thus lawyers should be exempted from the tax.

In a statement last week, the syndicate said that it "rejects" the law as a whole since it "violates technical, scientific and legal standards applied in all countries."

It also added that the legal professional should not be included among the professions subject to the VAT as it neither involves goods nor is it a
“professional and consultative service” as the law states.

The VAT law is part of the government's fiscal reform programme launched in July 2014 to reduce the country's ballooning budget deficit – estimated at 11.5 percent of GDP in fiscal year 2015/16.

The government reform programme 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 soon.

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