21 February 2024 11:11 PM

Egypt’s new foreign currency VAT doesn’t apply to imports: Minister

Tuesday، 28 November 2023 - 12:35 PM

Egypt doesn’t collect the value-added tax (VAT) in foreign currency on imports but on goods and services that are typically paid for in foreign currency, said Minister of Finance Mohamed Maait on Monday, according to a Cabinet statement.

Egypt doesn’t collect the value-added tax (VAT) in foreign currency on imports but on goods and services that are typically paid for in foreign currency, said Minister of Finance Mohamed Maait on Monday, according to a Cabinet statement.

VAT is deducted in foreign currency for purchases of goods and services paid in hard currency in tourist and other facilities, Maait confirmed.

In those cases, the tax collector can receive the VAT in Egyptian pounds on condition of proving that the collected amount is equivalent to its value in foreign currency.

Last week, the finance ministry issued a decision mandating the collection of VAT in foreign currency for goods and services paid for in foreign currency under the amendments to the Unified Tax Procedures Law.

Egypt is currently experiencing a severe US dollar liquidity crunch. Approximately $20 billion in hot money fled the local market as investors sought higher interest rates offered by other markets.

In response to the complex economic situation, the government announced a plan to collect $191 billion through 2026 by gradually expanding its initial public offering (IPO) program and introducing additional incentives for foreign investors, such as tax exemptions and golden licences.

In addition, Egypt's commitments under a $3 billion loan program with the International Monetary Fund (IMF) involve implementing flexible regimes for both exchange and interest rates in alignment with private sector standards, enhancing the role of the private sector in the economy, and accelerating the pace of IPOs.

Al-Ahram online

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