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Egypt imposes Value added tax on delivery service

Egypt Value Added Tax

The Arab Republic of Egypt has added the delivery service by electronic orders to the list of services and goods covered by value added tax.

The Egyptian Ministry of Finance said that based on the second paragraph of Article One of the Value Added Law No. 67 of 2016, the delivery service was subjected to a pre-set tax of 14%.

The imposition of various taxes on a number of goods and services in Egypt has increased in the recent period, as the Egyptian budget suffers from a large deficit in providing basic needs and raising goods.

The article stipulated the imposition of tax on goods and services, including those stipulated in the accompanying table of the law, whether local or imported, at all stages of their circulation, except for those exempted from them by a special provision.

As an exception to this, the tax rate on machinery and equipment used in the production of a good or the performance of a service is 5%, with the exception of buses and passenger cars.

A prominent government official had said that Facebook, Google and Twitter are still outside the tax accounts in Egypt, despite the value-added tax law subjecting electronic services to that tax.

On the other hand, he indicated that the lack of data and the difficulty of actually counting the volume of financial transactions and dealers are behind the failure to collect the tax since the law was issued in 2016.

Amendments to the law

The Parliament’s Plan and Budget Committee is likely to vote this week, definitively, on amendments submitted by the government to the value-added tax law.

The amendments aim to subject oils, baked goods, sweets, crackers, flour products (except bread), soap products, and industrial detergents to a 14 percent tax, instead of being subject to a table tax of 5%.

The amendments are also subject to all types of advertising services, and air conditioning and air conditioning units and units, to both value-added taxes and the schedule together, with a total of 19%.

At a time when the citizen suffers from periodic government decisions to raise taxes and fees to cover the largest proportion of state revenues, and reduce the deficit in the general budget, which is expected by 7.7% in the budget for the current fiscal year 2020-2021.

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