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Monday, 28 December 2020

Sign up for e-invoicing system — or else

The Finance Ministry is instituting a zero-tolerance policy on all large taxpayers that do not join the e-invoicing system by 1 July 2021, with plans in place to punish them and deny them basic services, benefits and incentives, Finance Minister Mohamed Maait said in a statement yesterday. The government had planned to have all large taxpayers join the e-invoicing system, which is currently running a trial phase of 134 companies, by May 2021, Mohamed Keshk, who heads an internal audit department at the Tax Authority’s large taxpayers’ division told us. New penalties facing large taxpayers (which number at around 2,800 companies) include:

#1- No longer being classified as a large taxpayer: The classification holds a number of distinct advantages that include expedited tax procedures, settlements, and less frequent auditing. These privileges will be taken away.

#2- Inclusion in Tax Authority’s black list: Part of the purpose of the system is to establish a black list of companies based on their level of compliance. These companies could face more frequent tax audits, and will become the focus of the ministry’s enforcement efforts.

#3- Cut off by the state: Government bodies and state-owned companies may cease all services and payments to these companies until they sign up for the e-invoicing system, the statement reads. This could include the company being barred from participating in state tenders and auctions.

#4- Kiss export subsidies goodbye: Large taxpayers will not be eligible to receive export subsidies until they sign up for the e-invoicing system.

What is this e-invoicing system, you ask? We have a primer on the system, it’s purpose, the timeline of implementation along with a list of phase one companies here.

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