Egypt passes tax law sought by IMF

The Myanmar Times - - International Business -

EGYPT’S par­lia­ment has passed a law on value-added tax, one of the re­forms promised in ex­change for a US$12 bil­lion loan agreed with the In­ter­na­tional Mon­e­tary Fund.

Un­der the leg­is­la­tion, the VAT is to be set at 13 per­cent for 2016-17 and 14pc the fol­low­ing fis­cal year.

Egypt and the IMF an­nounced in mid-Au­gust a pre­lim­i­nary agree­ment for a $12 bil­lion loan spread over three years, which still needs ap­proval from the IMF’s board.

In re­turn, the Egyp­tian au­thor­i­ties must adopt dras­tic eco­nomic re­forms to in­crease pub­lic rev­enues and re­duce costly state sub­si­dies.

The VAT re­places a sales tax of 10pc, although the govern­ment says about 50 ser­vices and prod­ucts will be ex­empt, in­clud­ing bread.

For it to take ef­fect, the new tax needs to be ap­proved by Pres­i­dent Ab­del Fat­tah al-Sisi.

Egypt hopes the $12 bil­lion fi­nanc­ing deal with the IMF will usher in an eco­nomic turn­around.

More than five years af­ter its 2011 up­ris­ing – partly fu­elled by eco­nomic dis­par­i­ties – that swept away vet­eran strong­man Hosni Mubarak, the coun­try is still reel­ing from the fall­out. –

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