The Finance Ministry has finished drafting the executive regulations for the value-added tax (VAT) law, Minister Amr El Garhy said in a statement issued on Saturday. The draft will be presented to industry professionals soliciting their opinion and comments. A second draft will be formulated at the end of the week, which include input from industry associations, he added. Deputy Finance Minister Amr El Monayer said the VAT aims to pull the grey economy into the official one, make it more difficult to dodge taxes, and improve the business environment in Egypt.

Lawyers beware, Finance doesn’t think much of your lawsuit: Abdel Moneim Mattar, outgoing head of the Tax Authority and now special commissioner charged with overseeing the VAT, said the Finance Ministry will not be looking to amend the VAT rates or the legislation until after it is fully implemented, Al Masry Al Youm reports. We’re reading that as Mattar speaking to lawyers, who have a filed a suit demanding the VAT be struck down. Mattar also had a message for pharma: Don’t blame the VAT for your woes as meds are VAT-exempt. The ministry is also working on a separate tax for SMEs, but did not state whether these would fall under the VAT-regime. The executive regulations are expected to outline how businesses that don’t meet the EGP 500K threshold to register for the VAT registration will be taxed.

Settlement on writing-off parallel market FX charges expected this week? More good news on the taxation front, as the ministry appears set to release regulations this week that would settle the issue of writing-off expenses incurred in sourcing foreign currency outside the banking system before the 3 November float of the EGP, said El Monayer. “After meeting with the Federation of Egyptian Industries and the Federation of Egyptian Chambers of Commerce, we have settled on allowing write-offs of 4-5%,” he tells AMAY. As we noted last week, prominent Cairo advisory firm Nasr Aboul-Abbas & Co believes that the current tax code considers the cost of the FX acquisition to be a direct tax deductible cost and allows for writing off expenditures without receipts for up to 7% of documented general and administrative expenditures. You can read Nasr Aboul-Abbas’ opinion here (pdf, Arabic).