Egypt Facilitates VAT Exemption for Imported Production EquipmentSource: www.export-egypt.com 5/18/2023, Location: Africa |
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Egypt has amended the Value Added Tax (VAT) Law to facilitate procedures for waiving VAT taxes on machines and equipment imported for production, according to a statement by the Ministry of Finance.
Under the new amendments, manufacturers are no longer required to submit certificates of origin, cash deposits, or letters of guarantee to receive an exemption from a five percent VAT on machines, equipment, and production lines imported to be used in industrial production and services. Instead, manufacturers should provide a pledge by themselves or by a legal representative, with a signature certified by banks, to the tax or customs authorities that they will pay applicable taxes if and when they are due. More tax incentives for green hydrogen Minister of Finance Mohamed Maait said that Egypt is providing tax incentives varying between 33 to 55 percent of due taxes to encourage the production of green hydrogen. Egypt is also providing tax incentives of up to 35 percent of the cost of each electric car produced locally, Maait added. He noted that the state treasury bears EGP 12 billion ($389.61 million) in credit facilities for agricultural, industrial, and tourism sectors, in addition to EGP 6 billion ($194.79 million) in electricity subsidies for the industrial sector. Maait added that there is a draft law presented to the House of Representatives to settle tens of thousands of tax files that have been accumulating for years by simplifying tax levy processes. On Wednesday, the minister said in a statement to Asharq Business that Egypt has paid $3.5 billion in bond dues during the first quarter of 2023. He expected the exchange rate of the pound to stabilize in December as the economy starts to recover from inflation. The Egyptian government has taken some steps towards improving the tax environment and incentivizing the private sector. The Supreme Council for Investment on Tuesday issued 22 decisions to encourage the investment sector in Egypt. The decisions included draft resolutions to reduce financial and tax burdens on investors. They also included amending Article 34 of Investment Law 72/2017 to allow the licensing of natural gas-based industry projects as one of the production inputs in order to operate under the free zones system, which could entail exemptions from income tax, sales tax, import, and export duties. Egypt's business community welcomed the government's new decisions bolstering support for investors in Egypt, while some members have called for more legislative reforms followed by relevant bylaws to see these decisions implemented on the ground. |
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