The IMF has apparently complained about the size of the exemptions list for the proposed value-added tax (VAT), said yesterday Deputy Finance Minister Amr El Monayer at a House hearing on the VAT geared to get feedback from the business community. He told the Budget and Planning Committee that a total of 52 goods and services are presently in line to be declared VAT-exempt, and said 99% of basic food would be VAT-exempt.

Meanwhile, there was plenty of whining as everyone else demanded more exemptions and / or lower baseline tax rates. The overwhelming consensus of the business leaders who attended the hearings: The VAT will hurt the economy and must be amended. Speaking as self-appointed representatives of our little community: Attendees didn’t do much to help the cause when they started throwing around the notion of inflation in the 100-180% range should the VAT goes through in its current form (cf: Al Shorouk). Many were opposed to the 14% baseline rate, while academics and representatives of trade unions who also attended the hearing are demanding that the exemptions list be expanded.

Among those demanding exemptions: accountants and other professional services firms, said Tax Authority chief Abdel Moneim Mattar at the hearing.

Representatives the three mobile network operators and Telecom Egypt also expressed reservations about the 8% VAT rate that will be applied to their service at a separate hearing held by the House ICT Committee, Al Mal reports. El Monayer reassured them that the resulting inflation will only be marginal. Former ICT Minister Hany Mahmoud, who attended the hearing, objected to the taxing of telecommunications services.

The criticisms even came from members of the government, as Atef Yakoub, head of the Consumer Protection Agency and the man who protected our tenders eyes from offensive advertisements during Ramadan, also voiced opposition to the law at the House ICT Committee heading. He suggested the law should be implemented in a way that shields low-income consumers from any new taxation.

The Planning and Budget Committee requested that all those attending submit their points on the VAT within the next 48 hours to be taken into consideration when it compiles its report.