Egypt government aims to increase VAT on snacks, sweets to 14%

The amendments also stipulate that some specific local raw materials will be exempted from VAT

  
Two Egyptian women shopping in a supermarket in Cairo, Egypt, December 1, 2019. Image used for illustrative purpose.

Two Egyptian women shopping in a supermarket in Cairo, Egypt, December 1, 2019. Image used for illustrative purpose.

REUTERS/Shokry Hussien

The Egyptian government has put forward amendments to the value-added tax (VAT) law that includes raising its rate on snacks and flour-based sweets to 14%, from the current 5%. The suggested amendments are still subject to the House of Representatives’ approval.

Naeem Research sees that the amendments, if approved, would affect snacks and sweet manufacturers badly, while they have already been negatively impacted by the novel coronavirus (COVID-19) pandemic.

On the other hand, the amendments also stipulate that some specific local raw materials will be exempted from VAT, offsetting some of the negative impacts on demand, Naeem Research added.

In a related context, real estate development companies are pushing to exempt sale and rent of non-residential units from VAT. They say that the move could increase costs for companies already suffering from reduced demand due to the pandemic.

The amendments, prepared by the government, aims to address tax distortions in the current law, which imposes tax on some non-residential units only. Under the current law, only commercial and administrative units rented in malls are subject to VAT, while non-residential units outside malls are tax exempted.

© 2020 Daily News Egypt. Provided by SyndiGate Media Inc. (Syndigate.info).

Disclaimer: The content of this article is syndicated or provided to this website from an external third party provider. We are not responsible for, and do not control, such external websites, entities, applications or media publishers. The body of the text is provided on an “as is” and “as available” basis and has not been edited in any way. Neither we nor our affiliates guarantee the accuracy of or endorse the views or opinions expressed in this article. Read our full disclaimer policy here.

More From North Africa