The batch of amendments to the value-added tax (VAT) law does not include new taxes on commodities bought online or purchased through traditional media, Minister of Finance Mohamed Maait said in a statement on Wednesday.

Maait denied remours on social media that a monthly tax will be imposed on Iphone users.

Maait clarified that VAT has been applied on all commodities and services purchased from the Egyptian market since the VAT law came into effect in 2016. He added that commodities purchased online (e-commerce) are subject to the VAT law and the tax is collected from the companies directly as is the case with Jumia and Souq.com.

For non-resident companies, the VAT is collected through Egypt’s Customs Authority as is the case with e-bay and Amazon, he said.

“The proposed amendments are related to developing the mechanism by which VAT is collected from non-resident companies for the customs authority directly for an easy and effective process,” Maait added.

Maait also denied imposing taxes on Internet users.

He stated that the new collecting system has been designed in accordance with international standards, the foreign companies and e-commerce application requirements.

In July 2019, the Finance Ministry formed a committee to amend the VAT law, which is part of a reform programme that was the basis of a $12 billion, three-year loan agreed with the International Monetary Fund in 2016.

It replaced a sales tax and broadened the tax base as Egypt set to strengthen the collection of income taxes.

The government collected EGP 660 billion ($39.83 billion) in taxes in FY 2018/2019, up by 16.6 percent from FY 2017/2018 at EGP 566 billion, according to the ministry.

Of the total tax revenues collected in FY 2018/2019, EGP 309 billion came from VAT, reported the ministry.

The VAT, currently at 14 percent, is a composite tax levied on the difference between the cost price and the sale price of domestic and imported goods.


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