Egypt 13% VAT 2016
Mon 29th Aug 2016
Egypt will introduce Value Added Tax from October 2016 at 13%.
The new rate was voted on in Parliament today. The standard rate will rise to 14% on 1 October 2017 as part of a compromise with the government.
VAT to boost economy:
The reasons for the consumption tax reform are:
- Existing 10% Sales Tax leads to compounding taxation on manufacturing and deters outsourcing
- VAT shifts the tax burden from job-creating companies to consumer spending.
- Egypt needs to match the VAT regimes of Turkey, India (GST in 2017) and China to ensure it becomes a global manufacturer
- VAT will broaden the tax base to more services
- The International Monetary Fund made the reform conditional on further loans to Egypt