The Tax and Customs Committee at the Federation of Egyptian Industries (FEI) is set to finalise its proposals for the new amendments to the Value Added Tax (VAT) law and the Income Tax Law in the first half of September for submission to the finance minister, according the head of the committee Mohamed El-Bahi.
El-Bahi told Ahram Online that the Ministry of Finance is eager to learn about the committee’s approach to the expected amendments the ministry is currently working on. He called on the committee members to present their proposals for the new amendments, adding that this action is part of the FEI's role in achieving balance between financiers and the state.
“Actually, the VAT law is flawed in some respects, especially since the substance of the law is based on unifying the tax value to be imposed on all inputs, but, as we have witnessed on the ground, it is devoid of meaning and is being applied in the wrong way. There are some goods that are subjected to two types of taxes,” El-Bahi said.
He also clarified that the Income Tax Law has many flaws that need to be fixed in the expected amendments.
“We called for a new law to be drafted instead of amending the current one. This new law is supposed to deal with all the problems that have been caused under the umbrella of the current law,” El-Bahi added.
He stated that the committee is supposed to finalise its proposals during the first half of September.
The government has announced its intention to amend the VAT Law and draft a new income tax law in July without amending the rates.
The VAT law is part of a reform program that was the basis for a $12 billion, three-year loan agreement with the International Monetary Fund in 2016.
It replaced a sales tax that economists said was distorting the market and introduced at 13 percent tax, starting September 2016, which was raised to 14 percent a year later.
“EGP 309 billion was the total tax revenue collected under the VAT Law in fiscal year FY 2018/19,” Finance Minister Mohamed Maaet said previously.
He also said that an initial draft of the new income law would be released in September.