The Clap
After the government issued some measures related to the value-added tax (VAT), there are 4 main benefits the government stands to gain from these measures.
Benefits of VAT
- The amendments aim to support spending on the industrial sector, due to the exemption of machinery used in industrial production from VAT, which was previously subject to a tax of 5%-14%.
- Enhancing investments in economic zones due to the exemptions granted to companies in free zones.
- Encouraging tourists to spend more, given they will have the right to claim a refund of the VAT on purchases of more than EGP 1,500 instead of what was on purchases of more than EGP 5,000 before.
- Facilitating the registration of Egyptians abroad in the Tax Authority, reducing the process of tax evasion.
Now What
It is expected that the government will unveil a document for the new tax policy that will be implemented over the next 5 years in the coming period.
