VAT will be lower for tuition, Garhy will introduce tax on fuels -Reports. It appears the value-added tax (VAT) bill which will be discussed by the House of Representatives with Finance Minister Amr El Garhy today will include a different set of exemptions than were previously reported. International schools and universities will be taxed at 5%, while professional services (including the services of legal counsel and accountants) will be taxed at 10%, Al Borsa reports. Contrary to previous reports, not all staples of food will be VAT-exempt: Vegetable and cooking oils and grease will be taxed at 1%, while confectionary goods and all flours apart from those used in bread will be taxed at 5%.

Another about face was on fuels, as diesel, petrol, and kerosene will be subject to a tax ranging from EGP 0.18-EGP 0.63 per liter depending on whether it is imported or not. Construction, imported production inputs for the pharm industry, fertilizers and all forms of air-conditioned transportation will be taxed at 5%. Worth noting: the general taxation rate for the VAT has not been set per the latest draft presented to the House.

Financial services will be VAT-exempt: Al Mal has published the list of the 32 goods and 20 services that are now set to be VAT-exempt.

What about cars? Al Borsa claims the VAT rate for automobiles will reach 14%. An additional 1% tax will be imposed on passenger cars with engines below 1,600 cc. Cars of up to 2,000 cc (including trucks and SUVs) will be taxed at 15% if they are made locally, while imported ones will be taxed at 30%. This will drive inflation of 2-3% for locally assembled passenger cars, trucks and SUVs, and a 4-5% increase in prices for imported vehicles, said Ra’fat Masrooga, the head of the Automotive Marketing Information Council (AMIC), an industry association. Dealers will bear 14% of the tax on imported vehicles which will then be passed on to the consumer. Masrooga urged the government to quicken the pace on releasing the executive regulations for the VAT legislation to not allow car dealers the opportunity to price-gouge.

Look for more details today if Finance Minister Amr El-Garhy appears before the House to brief MPs on the tax.