ArabFinance: The Ministry of Finance imposed a 14% value-added tax (VAT) on all online delivery services provided by restaurants and shops, according to an executive amendment to the VAT Act announced by Minister Mohamed Maait.

The law came into force on Thursday, June 3rd.

All restaurants and businesses with more than EGP 500,000 in annual revenues will have to charge and remit VAT on online delivery services.

Under the law, retail and restaurant chains, tourist-trap restaurants, as well as retail stores and restaurants in airports and shopping malls, were required to charge the 14% levy on delivery fees.

Individual shops and traders, meanwhile, were able to sell goods online without collecting VAT from the buyer.

Maait added that the ministry is to increase tax collection by 18% in the coming fiscal year (FY), targeting total tax revenues of EGP 983 billion during FY 2021/2022.

In May, the Egyptian government announced studying imposing a 14% VAT on multinational tech firms.

VAT revenues are currently expected to fall, with the draft budget forecasting EGP 390 million in VAT receipts during FY 2021/2022.

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