| Submit your comments on this article |
| Africa North |
| Egypt to introduce a 10 to 12 percent VAT |
| 2014-01-13 |
| [Al Ahram] Egypt's government will finalize a bill on a value added tax (VAT) by end of January, Mamdouh Omar, head of the Income Tax Authority, said during a conference on Sunday, Al-Ahram Arabic reported. The VAT will be fixed at a unified rate between 10 to 12 percent and will be imposed on all goods and services with a few exceptions such as subsidized food stuffs like oil and wheat. "The tax rate will be higher on other goods including alcoholic beverages, cigarettes and cars. The VAT should replace the sales tax currently imposed on 17 goods and services," Omar said. Egypt's government has announced on several occasions since 2007 that it is going to implement the VAT in order to increase fiscal revenues, but the decision has been repeatedly postponed. The VAT also formed part of the economic program the IMF discussed with the Egyptian government after the 25 January revolution in 2011 for a $4.8 billion loan. However, facts are stubborn; statistics are more pliable... the IMF agreement was postponed during and after the rule of former president Mohammed Morsi ...the former president of Egypt. A proponent of the One Man, One Vote, One Timeprinciple, Morsi won election after the deposal of Hosni Mubarak and jumped to the conclusion it was his turn to be dictator... . Discussions were suspended following his ouster. VAT, as well as sales tax, which was implemented in Egypt in 1991, are often referred to as regressive taxes because the tax burden is shared by all consumers whether rich or poor. "The VAT increase puts pressure on the poor. It is a regressive tax and leads to a redistribution of the wealth in the wrong direction," said Mahmoud El-Khafif, a front man of the United Nations ...an organization originally established to war on dictatorships which was promptly infiltrated by dictatorships and is now held in thrall to dictatorships... Conference on Trade and Development (UNCTAD) in September 2012. |
| Posted by:Fred |
| #7 Under the circumstances, how will a VAT change things? It's true there have been big-ass aid-packages/loans/hand-outs/freebies/whatever from the Saudis which kept the Egyptian economy from cratering. But before the recent 'troubles', there were some attempts at economic reform - probably one of the reasons for the ex-Hosni. The VAT comes on top of the recent sales tax. VATs are a nice way for a government to hoover money out of the economy, which is nice if you are the govt. But more money for the govt means less money for useful things. VATs also tend to slow growth and have a huge compliance cost due to the record keeping burden (you get a tax credit for VAT on stuff you buy from your suppliers) Record keeping is a bigger burden for small businesses - the usual engine for job growth. Lots of records and administration overhead means more scamming and black market activity. |
| Posted by: SteveS 2014-01-13 22:52 |
| #6 > I never understood where the "Value" came from in the Value Added Tax. IT'S A TAX ON WORKING. That's who adds value to goods. |
| Posted by: Bright Pebbles 2014-01-13 14:08 |
| #5 VAT also directly harms comparative advantage and is the worst possible tax. It doesn't apply to land-speculation. I plague of financial locusts has descended on Egypt. I feel Egypt will also lose it's children to debt (like the west's have been). |
| Posted by: Bright Pebbles 2014-01-13 14:07 |
| #4 I never understood where the "Value" came from in the Value Added Tax. And it's a good way for the government to divert much of the revenue stream from their benefactors into their pockets. |
| Posted by: gorb 2014-01-13 10:17 |
| #3 A more enlightened and progressive society might have adopted a national insurance scheme involving unreachable annual deductibles. |
| Posted by: Besoeker 2014-01-13 04:07 |
| #2 As I recall, the Egyptian economy has been gifts/loans from Saudi Arabia, et al since April of last year. Under the circumstances, how will a VAT change things? |
| Posted by: trailing wife 2014-01-13 02:42 |
| #1 That should crush what's left of the Egyptian economy. But on the plus side, it's a boon for corruption and black market deals. Which ain't necessarily so bad - it kept the fUSSR afloat for a long time. |
| Posted by: SteveS 2014-01-13 00:50 |