The Egyptian government targets 4 gains from the new amendments it approved to the Value Added Tax Law. And the Egyptian Minister of Finance, Mohamed Maait, issued a decision to amend some provisions of the executive regulations of the value-added tax law.
According to a statement issued by the ministry, the New modificationswhich was published by the Official Gazette last week, defines controls and procedures for benefiting from a group of new tax exemptions aimed at supporting manufacturing and promoting exports.
The new amendments aim to support capital expenditures in the industrial sector, as machinery and equipment imported from abroad or purchased from the local market for factories and production units for use in industrial production will be exempted from value-added tax for a period of one year. Machinery is normally subject to a value added tax of between 5 and 14%.
It also aims to promote investment in economic zones, as the amendments provide for exempting goods or services received for projects of economic zones of a special nature from value-added tax.
Also, the Egyptian government aims, through these amendments, to encourage tourists to spend, as they give the amendments to tourists the right to claim a refund of the value-added tax collected upon their exit from the country, on a number of purchased goods whose value exceeds 1500 pounds, in contrast to the previous limit of about 5000 pounds.
Finally, it aims to facilitate registration with the Tax Authority, as the amendments included facilitating procedures for non-residents to register with the Egyptian Tax Authority, which allows it to be done online and without the need for a legal representative.
read more: Egypt commits to the IMF to slow down projects and increase fuel prices
The tax adjustments are the latest in a series of measures designed 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, the Cabinet announced, in the wake of the latest devaluation of the Egyptian currency against the US dollar on January 4, a new low-yield financing initiative for the agricultural and industrial sectors, at a value of EGP 150 billion, at an interest rate of 11%. The council also provided new facilities for companies to obtain a golden license.
The government aims to increase exports to $100 billion annually by the middle of the decade and reduce reliance on imported products in a bid to narrow the current account deficit. These goals would increase the resilience and ability of local industries in facing external shocks such as the repercussions of the Corona virus and the Russian war in Ukraine.
The government is set to unveil the country’s tax policy document in the next few weeks, which may include amendments to capital gains tax and income tax.