The Egyptian government is targeting 4 benefits from the new amendments it has approved to the Value Added Tax Law. And the Minister of Finance of Egypt, Mohamed Maait, issued a decision to amend some provisions of the executive regulations of the law on value added tax.
According to a statement from the ministry, the new amendments, which were published in the Official Gazette last week, set out controls and procedures to benefit from a group of new tax incentives aimed at supporting production and promoting exports.
The new amendments aim to support capital spending in the industrial sector, as machinery and equipment imported from abroad or purchased locally for factories and production units for use in industrial production will be exempt from value added tax for a period of one year. . Machines are usually subject to value added tax ranging from 5 to 14%.
It also aims to encourage investment in economic zones, as the amendments provide for exemption from value added tax on goods or services received under special economic zone projects.
In addition, through these amendments, the Egyptian government seeks to encourage tourists to spend, as they give tourists the right to claim a refund of the value-added tax collected when they leave the country on a number of purchased goods. whose value exceeds £1,500, as opposed to the former limit of around £5,000.
Finally, it aims to simplify registration with the tax authority, as the amendments included simplifying the procedures for registering non-residents with the Egyptian tax authority, allowing it to be done online and without the need for a legal representative.
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The tax adjustments are the latest in a series of measures to support the economy, boost investment and increase exports in response to the economic crisis caused by the war in Ukraine and tightening global financial conditions.
A few days ago, after the latest devaluation of the Egyptian currency against the US dollar on January 4, the Cabinet announced a new LE 150 billion low-income financing initiative for the agricultural and industrial sectors. at an interest rate of 11%. The council also provided new opportunities for companies to obtain a gold license.
The government aims to increase exports to $100 billion a year by mid-decade and reduce dependence on imported products in an attempt to reduce the current account deficit. These goals will increase the resilience and ability of local industries to withstand external shocks such as the effects of the Corona virus and the Russian war in Ukraine.
In the next few weeks, the government intends to release a document on the country’s tax policy, which may include amendments to the capital gains tax and income tax.
