Egyptian Pharmacies Compromise With Tax Authority

by Lorys Charalambous, Tax-News.com, Cyprus

24 February 2009

Many privately owned pharmacies in Egypt have agreed to re-open after top governmental officials agreed to a compromise with unions. The unions successfully argued against the implementation of a sales tax on a retroactive basis.

The tax law, which was enacted in 2005, but never enforced, would require pharmacies to include all goods in the tax net - both medicines and other goods such as toiletries. Many pharmacies closed across the nation after the Egyptian Finance Ministry announced that they would have to pay the increased tax retroactively from the date of the law's enactment.

Following two-day strikes the Egyptian Finance Ministry conceded on the matter announcing that, although the tax measure would go ahead, it would not be retroactive, thus granting pharmacies, in effect, a five-year tax holiday on their previous earnings. Although negotiations are ongoing for ‘an agreement to satisfy both parties’, both the government and unions stated that they were optimistic that discussions would soon be finalised.

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