Egypt's Finance Ministry Reveals VAT-free Goods and ServicesSource: www.export-egypt.com 5/20/2016, Location: Africa |
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Egypt's finance ministry has listed 52 commodities and services that will be exempted from a new value-added tax (VAT), which is expected to be applied this year after it is approved by parliament.
According to a ministry statement emailed to press on Friday, the exemption list will include all essential food goods and dairy products, in addition to babies’ milk and their nutritional supplements. Foods that are sold to consumers through shops and restaurants without touristic licences will also be free of VAT, the statement said. The long-delayed levy, which has recently been approved by the cabinet, is set at a flat rate of 10 percent. The government aims to avoid tax evasion by applying it to each member on the chain of production of goods and services, including the final retail stage, in place of the current sales tax which is imposed only on the final sale to the customers. Imposing VAT would have a one-time impact on prices of all goods excluding food, raising them by between 0.5 and 2.5 percent, the ministry has said in previous statements. Crude, natural gas, butane, raw materials extracted from quarries and mines, electricity, mineral water, prosthetic body parts and paper are among the tax-exempted commodities. Services that are exempt include banking operations and financial transactions under the state’s financial watchdog EFSA such as leasing. The ministry added that the exempted services will also include education, scientific research and services provided by religious and cultural establishments. Egypt's government hopes to raise tax revenues by around EGP30 billion upon implementation of the new tax. |
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