Egypt Ratifies VAT Law
With President Abdel Fattah el-Sisi’s approval, Egypt completed its ratification procedures to bring about the introduction of VAT from the 2016/2017 fiscal year. VAT will be introduced at 13 percent. The rate will rise to 14 percent from the beginning of 2017/2018.
In May, Egypt’s Finance Minister disclosed that 52 goods and services will be exempt from VAT. The list includes basic foodstuffs. businesses targeting tourists, which include restaurants and hotels, will not be subject to VAT.
Certain companies in the natural resources sector will be exempt, as will banks, education, scientific research. Religious organizations will also receive exemptions.
The long-awaited introduction of VAT is a vital part of plans to greatly reduce the nation’s budget deficit, which is expected to reach about 11.5 percent of gross domestic product this year.