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Egypt Ratifies VAT Law

by Lorys Charalambous,, Cyprus

13 September 2016

With President Abdel Fattah el-Sisi's approval, Egypt has completed its ratification procedures to bring about the introduction of value-added tax from the 2016/17 fiscal year.

VAT will be introduced at a headline rate of 13 percent. The rate will rise to 14 percent from 2017/18.

In May, Egypt's Finance Minister disclosed that 52 goods and services will be exempt from value-added tax. This list reportedly includes basic foodstuffs. Businesses targeting tourists, including restaurants and hotels, will not be subject to VAT also.

Certain companies operating in the natural resources sector will be exempt, as will banks, although further clarification on the taxation of these sectors is expected. Education, scientific research, and religious organizations will also receive exemptions.

The long-awaited introduction of VAT is a key part of plans to significantly reduce the nation's budget deficit, which is expected to reach about 11.5 percent of gross domestic product this year.

TAGS: Finance | VAT rates | tax | VAT legislation | budget | food | legislation | Egypt | services | Education | Education

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