ICEC

Investors Associations urges Egypt govt. to exclude free zones from VAT law

Egyptian Union for Investors Associations urged the government to amend the tax price in Value Added Tax (VAT) law to 12 percent, Head of the Union Mohamed Farid Khamis stated Sunday.

The union also urged the government not to impose the VAT on private free zones since most of their sales are untaxed exports.

Head Khamis suggested imposing a 20 percent-tax on luxury goods and exempting capital goods to avoid disputes with investors, encourage industrial firms to boost their capacities, increase renewing and replacing processes.

In May 2016, Egyptian Cabinet approved the VAT bill which is set to replace the sales tax and widen the country’s tax base.

The VAT law will be imposed on goods and services at each stage of production or distribution. The taxpayer would pay at every stage a tax on the value added by that specific stage to the final value of the good or service. The increase is then added to the sale price of the good or service to the end consumer.

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