We have a VAT law: The House of Representatives passed the Ismail government’s proposed VAT legislation yesterday in what stands as a model of legislative efficiency. The only changes to the draft proposed by the Finance Ministry were to reduce the rate to 13% in the first year of implementation, with the rate rising to 14% from year two onwards. The House also decided to increase penalties for tax evasion, Al Ahram reported. The law comes with a list of exemptions that includes 56 goods. We still await the specific details.

The VAT law now includes clauses setting the penalties for tax evasion at either a three to five year prison sentence, an EGP 5,000-50,000 fine, or both. The amendments also stipulate that tax evasion claims can only be filed at the request of the Finance Minister, while also giving the Minister the authority to resolve disputes outside of court if the due taxes are paid along with a penalty. Requests by MPs to have the tax evasion penalties set as a percentage of the taxes dues were rejected by Speaker Ali Abdel Aal, who said they would be unconstitutional since the constitution requires tax penalties to be set in nominal terms.

After voting to approve the law, Abdel Aal said “the cycle of reforms is moving fast … those trying to impede reforms should revise their positions … I am here to defend the interests of those least well-off,” according to Al Masry Al Youm.

We have a detailed look at the VAT in today’s Speed Round and a primer on what a VAT is and how it (should) work in Making the VAT Work: A Primer, below