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Thursday, 25 August 2016

El Garhy apparently promises 57 VAT-exempt goods, meets continued resistance on 14% rate

Finance Minister Amr El Garhy apparently told the House Economic Committee that 57 goods and services have been exempt from the value-added tax (VAT), committee member Ahmed Farghal tells Al Mal. Among the items: media (including TV shows and radio programs) as well as air and sea travel, said Farghal. As we noted yesterday, El Garhy had been quoted as saying on Tuesday that 52 items were “completely exempt” from a VAT. The ministry issued a statement on Wednesday explaining once again that fuel products will not be subject to VAT.

Meanwhile, the head of the Tobacco Division of the Federation of Egyptian Industries is claiming that the Finance Ministry approved exempting some local brands of cigarettes “popular among Egypt’s poor” from the VAT, Al Masry Al Youm reports.

The rate debate continues: El Garhy persisted in calling for a 14% baseline VAT rate during what’s been described as a contentious debate at the House Economics Committee on Monday. Committee members were apparently pressing for a 10% rate. This comes as the Union for Egyptian Investors Associations continued to push for a 12% tax rate on Wednesday, publishing its list of recommendations for the VAT legislation. These include a 20% tax on luxury goods, exempting capital goods from any taxes, exempting projects in free zones from the tax, eliminating the minimum EGP 500K requirement to register for the VAT, and swift rebates on exports.

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