Back to the complete issue
Thursday, 16 June 2016

Werr says scrapping VAT might be a good idea

Value added taxes (VAT) are no longer a salve for the Egyptian economy, veteran finance journalist Patrick Werr writes for The National. “Last summer, [introducing VAT] seemed like a good idea,” but now, Werr says, “the delay to the VAT is probably a good thing. The economy’s performance has been disappointingly bad over the past two years, making it a particularly bad time to impose a major tax on business.” He says one possible outcome of VAT “is that companies will pass the extra cost onto consumers who, lacking money, will buy fewer goods and services” which, if the drop is big enough, could lead to reduced tax revenues. Other concerns are political; “does the government want to aggravate the business community for what in the end may turn out to be a pittance in new revenue?” Instead, Werr says the government should reconsider a “major” EGP devaluation.

Enterprise is a daily publication of Enterprise Ventures LLC, an Egyptian limited liability company (commercial register 83594), and a subsidiary of Inktank Communications. Summaries are intended for guidance only and are provided on an as-is basis; kindly refer to the source article in its original language prior to undertaking any action. Neither Enterprise Ventures nor its staff assume any responsibility or liability for the accuracy of the information contained in this publication, whether in the form of summaries or analysis. © 2022 Enterprise Ventures LLC.

Enterprise is available without charge thanks to the generous support of HSBC Egypt (tax ID: 204-901-715), the leading corporate and retail lender in Egypt; EFG Hermes (tax ID: 200-178-385), the leading financial services corporation in frontier emerging markets; SODIC (tax ID: 212-168-002), a leading Egyptian real estate developer; SomaBay (tax ID: 204-903-300), our Red Sea holiday partner; Infinity (tax ID: 474-939-359), the ultimate way to power cities, industries, and homes directly from nature right here in Egypt; CIRA (tax ID: 200-069-608), the leading providers of K-12 and higher level education in Egypt; Orascom Construction (tax ID: 229-988-806), the leading construction and engineering company building infrastructure in Egypt and abroad; Moharram & Partners (tax ID: 616-112-459), the leading public policy and government affairs partner; Palm Hills Developments (tax ID: 432-737-014), a leading developer of commercial and residential properties; Mashreq (tax ID: 204-898-862), the MENA region’s leading homegrown personal and digital bank; Industrial Development Group (IDG) (tax ID:266-965-253), the leading builder of industrial parks in Egypt; Hassan Allam Properties (tax ID:  553-096-567), one of Egypt’s most prominent and leading builders; and Saleh, Barsoum & Abdel Aziz (tax ID: 220-002-827), the leading audit, tax and accounting firm in Egypt.