Egypt's new value-added tax was officially implemented on Friday shortly after Egyptian President Abdel-Fattah El-Sisi ratified it, Egypt's finance ministry said in a statement on Saturday.
The statement added that following Eid Al-Adha holiday this week, meetings would be held with business representatives to explain the mechanisms that the ministry would use to ensure correct implementation of the new law, as well as clarifying the needed procedures for companies paying the tax.
The ministry added that the law allows a three-month deadline as a transitional period so that companies and all those involved within the law can adjust their conditions, stressing that no fines would be imposed for a delay in payments of the due tax.
According to Article 9 of the VAT law, bylaws on the tax's implementation will be issued by the finance minister within 30 days from the law's ratification in the official gazette.
In August, Egypt's parliament approved the law at a rate of 13 percent for the 2016/17 fiscal year, to rise to 14 percent the following year.
It also increased the list of exempted commodities to 56 from 52 items.
The exemption list includes all essential food goods, dairy products, baby formula and all local and imported medicine.
Non-exempted goods and services falling under the new tax would include TV and radio production, taxed under the new VAT at a rate of 5 percent, imported vegetables, imported wheat products, cosmetic surgeries for non-medical causes, alcoholic drinks, and mobile phone services.
The VAT aims at reducing tax evasion, as it will be applied to each member of the production chain of goods and services, instead of the current sales tax that is imposed as a one-off on the final sale to customers.
The long-awaited VAT law is part of the government's fiscal reform programme, implemented in July 2014, through which energy subsidies are being cut and new taxes are being introduced to reduce the country's ballooning budget deficit – estimated at 11.5 percent of GDP in fiscal year 2015/16.
The reform programme, which has been endorsed by the International Monetary Fund, has lead to an initial agreement between the government and the global lender on a $12 billion fund facility over three years.
The initial accord is expected to be approved by the fund's executive board in the coming weeks.
President El-Sisi has strongly campaigned in recent months for his programme of economic reforms stressing on more than one occasion "that there is no time to postpone reforms that should have been put in place years ago."
Egypt, which relies heavily on imports, particularly of foodstuffs, has been suffering a severe shortage of US dollars in the wake of political and security unrest that has scared off tourists and foreign investors, two major sources of hard currency.
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Egypt's petroleum ministry announced late on Thursday new raises in the fuel subsidized prices that will come into effect as of Friday.
In an official statement, the ministry sent a table that shows the fresh price hikes of octone, diesel, butane gas, natural gas and the low-quality fuel of mazut.
The price of 80-octane gasoline has gone by 30.5 percent from EGP 1.60 per liter to EGP 2.35.
The price for 92-octane gasoline changed from EGP 2.60 to 3.50, while the diesel price is now EGP 2.35 compared to 1.80, according to the statement.
In late 2012, the government liberalised the price of the highest quality gas, octane 95, which is currently sold at EGP 6.25 a litre.
The price of a small gas cylinder has gone up from EGP 12.5 to 15. However, the big cylinder will cost EGP 30 instead of 25.
The move comes as part of the government's plan to slash its total subsidy bill in the new budget by 14 percent to reach EGP 130.1 billion in the 2016/17 fiscal year compared to the current fiscal year to end in June.
The government plans to trim the petroleum subsidy bill by 43.5 percent to reach EGP 35 billion and the electricity subsidy bill by 6.4 percent to EGP 29 billion in 2016/17 due to the falling in the global oil prices.
Egypt embarked on a fiscal reform programme in July 2014 in an attempt to curb the growing state budget deficit -12.2 percent of the GDP- through cutting subsidies and introducing new taxes including the value added tax.
The reform programme is getting Egypt closer to the IMF board approval of a $12 billion loan package to be delivered over three years.
Long queues of motorists lined up at several Cairo petrol stations, hoping to fill up their tanks before the new increases become effective.
Newly floated Egyptian pound moves little as interbank trading begins ht
tp://reut.rs/2eru4A1 @Reutersさんから
Egypt's pound was almost steady early on Sunday as banks began trading freely for the first time since authorities ditched the currency's peg in a policy shift designed to crush a black market and clinch an International Monetary Fund loan.
Interbank trading began at 1030 a.m. (0830 GMT) but activity was extremely slow because banks were uncertain about the prospects for supply and demand of U.S. dollars.
The pound weakened slightly from 15.50 against the dollar on opening to 15.75 in the first 75 minutes. Banks were bidding for dollars around 15.60 and offering around 16.00. The pound had closed at 15.35 on Saturday.
The value of the Egyptian pound was further weakened on Tuesday among local lenders to register an average of EGP 17.8 per US dollar, falling from an average of EGP 16.8 on Monday, according to online data from four major banks.
However, in the black market, the greenback recorded an average of EGP 18.25, a trader told Ahram online on condition of anonymity.
The new rates come on the third working-day after the Central Bank of Egypt decided at the end of last week to float the pound against foreign currencies, allowing local banks to freely set the exchange rate in an attempt to attract foreign cash liquidity from the informal market and stabilise the country’s ailing economy.
“We are expecting the dollar’s buying rate to rise to EGP 20 by end of this week,” the trader said, attributing this to importers who are willing to offer this high price to attract the largest amount of the dollars, “which they do not find in the official market.”
“Foreigner students, employees and families of expat workers are the people who sell their dollars to these importers,” the trader added.
Last week, the Egyptian Federation of Chambers of Commerce called on member merchants to refrain from dealing with the parallel market for two weeks and to reduce their imports – excluding essential commodities – in the next three months in an attempt to eradicate the black market.
Taxi meters will now start at EGP 4 instead of EGP 3
Ayat Al Tawy , Tuesday 22 Nov 2016
Cairo’s governor has increased the tariffs of the city’s white taxis by 25 percent in the wake of hikes in fuel prices earlier this month, part of a package of government economic reforms.
Taxi meters will now start from EGP 4 instead of EGP 3 for a one kilometer journey, with each subsequent kilometer priced at EGP 1.75, up 35 piastres from the previous rate of EGP 1.40.
The new tariff increases “have been introduced following final approval from the cabinet," read a statement by Governor Atef Abdel Hamid released on Tuesday.
Cabs in the Cairo area had begun operating under the new rates on Monday.
"All prices are going up like crazy and our [fares] have remained the same. That was unfair," a taxi driver in downtown Cairo told Ahram Online.
A committee of experts which imposed the new increases aimed at fair prices for both drivers and passengers, Cairo governorate official Mohamed El-Sheikh said in comments carried by state news agency MENA.
The last time taxi tariffs were increased was in June 2014, when the starting kilometre went up from EGP 2.5 and the subsequent kilometres from EGP 1.25.
White cabs were first introduced in the capital in 2009 to replace rickety black-and-white vehicles which operated without working meters.
Earlier this month, Egypt reduced subsidies of petroleum products leading to an increase in prices at the pump. Lower grade petrol increased by nearly 50 percent to EGP 2.35 a litre, while higher octane fuel rose by over a third to EGP 3.5 per litre.
Natural gas used in vehicles also went up by some 45 percent to EGP1.6 per litre.
The hikes in prices of petroleum products came on the same day the country took the major step of floating the Egyptian pound in hopes of addressing a dollar crunch.
The pound has since slid from EGP8.8 to the dollar to approximately EGP17.5.
The resulting rise in prices has caused concern among many Egyptians.
The Egyptian pound depreciated further against the dollar in some banks mid-Tuesday, reaching a selling price of 19.75 compared to between 18.95 and 19.15 on Monday.
The dollar’s highest selling prices were seen at the Egyptian Gulf Bank and Misr Iran Development Bank. Meanwhile, government-owned banks; Banque Misr, Al-Ahli Bank and Banque du Caire sold dollars at the lower rate of LE19.2.
On Monday, the Egyptian pound declined by more than LE0.8 to the dollar in banks after being stable for three days.
A banker told Reuters that the reason behind the decline of the Egyptian pound is an increase in dollar requests towards the end of the year as companies are "closing their books or seeking to repatriate profits."
Senior Economist at Arqaam Capital Reham al-Desouky said that a decline in the Egyptian pound’s exchange rate against the dollar will depend on the inflows of foreign currency “by the beginning of the new year” in the form of investments in treasury bonds and stocks.
Egypt floated the pound on November 3 and raised interest rates by 300 basis points in a dramatic move welcomed by businesses as the key to unlocking investment.
Egypt's dollar peg had drained the central bank's foreign reserves, which have been hit hard by reduced foreign investment following political turmoil in the past few years, forcing the bank to impose capital controls and ration dollars, a situation that made the black market for the foreign currency thrive.
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Governor of Cairo Approves a Raise in the White Taxi Tariff htt
p://www.cairoscene.com/Buzz/Governor-of-Cairo-Approves-a-Raise-in-the-White-Taxi-Tariff @Cairosceneさんから
n keeping up with the surge in prices Egypt has been experiencing, especially in the aftermath of the late lift of fuel subsidies and the free floatation of the Egyptian pound, the Governor of Cairo, Atef Abdel Hamid, approved a new tariff for the white taxi on Monday the 21st, according to Al Bawaba.
The new tariff would have the metres start at 4 EGP instead of the previous 3 EGP, and the per kilometre price will be set at 1.75 EGP instead of 1.40 EGP, which is an increase of 35 piasters per kilometre. The waiting rate will also increase by 14 piasters to stand at 39 piasters per minute (14 EGP per hour.)
The new tariff is currently being gradually activated among taxis, where some have already started operating by it.
