Egypt VAT Update and Income Tax Regulation Introduction
Egypt is the most highly populated nation in the Middle East. With over 90 million individuals living within, it beats out the next closest country, Iran, by around 15 million people. It may not have the largest economy of the region, though it is still undoubtedly significant. Further to this, the country is globally recognised and receives numerous tourists annually due to the fantastic history and sites that can be explored and visited therein.
The nation has recently looked to make specific changes to the structure of VAT (Value Added Tax) as well as the Income Tax. The VAT was initially introduced in September of 2016 and replaced Sales Tax. The rate is currently 14%. However, certain aspects of VAT are going to receive amendments shortly.
The changes are occurring beyond just VAT. Income Tax is also under scrutiny. The current rate ranges from between 10-25%, though the lower bound (below which an individual is exempt) is EGP 8,000. The changes that are expected and the deadlines are as follows.
The Amendments and Changes
VAT and Income Tax bring a significant amount of money to the government, which can then be utilised in expanding public spending. However, calculating appropriate rates is very much a balancing act between what is reasonable, and what the government can then provide.
A new Income Tax law is currently being drafted, and so there are few details on what this might bring. Further, the officials are not now in a position to clarify what the VAT amendments will entail. There was a previous rise in the VAT rate which was initially 13%, though whether the current 14% rate will change is as of yet unknown.
The VAT regulation will receive a re-visit in the 2019-2020 fiscal year, which has now begun (as of July 1), and the Income Tax regulation draft is expected within the fiscal year also.