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Tuesday, 31 October 2017

Additional fees on freezones in the Investment Act regs earns ire of freezone investors

Additional fees on freezones under the Investment Act regs earned the ire of freezoneinvestors the day they came into effect: The executive regulations to the new Investment Act came into effect yesterday after they were published in the Official Gazette (pdf). The ink had not yet dried when a new controversy erupted over taxes and fees the regs impose on freezones. The Private Freezones Investors Association is saying that the regs impose a 1% tax on goods exported from freezones, a 2% fee on all goods sold in Egypt from freezones, and a 1% fee on the operating costs of industrial projects in a freezone. The association views these additional fees as violating article two of the Investment Act, which guarantees the sanctity of tax incentives listed in the law, the association’s head Moatasem Rashed tells Al Borsa. There have even been suggestions that the organization could mount a legal challenge on the issue. Government sources tell the newspaper that General Authority for Freezones and Investment (GAFI) is willing to hash it out and has hinted that amendments to the regs could be in the works.

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