Parliament’s Budget and Planning Committee has decided to leave setting a value-added tax (VAT) rate to the public session for discussion and vote.
Yasser Omar, a member of the parliament’s Budget and Planning Committee, said that the committee’s report will be put up for discussion in a public session without a recommended rate.
The original bill submitted to the committee included a rate of 14%. The government targets to collect EGP 32bn from the tax for the current fiscal year.
A previous vote last week set a rate of 12% before the committee decided to hold another vote to settle on a final rate.
Omar explained that last week only 65% of the committee’s members attended the meeting, in which five members voted for 12%, four voted for 12.5%, and another four for13%.
Moreover, the last meeting between the committee and Finance Minister Amr El-Garhy decided to include medicine and special needs care within the tax-exempted goods and services.
Omar noted that El-Garhy stressed that a large portion of the tax revenue will go towards supporting low-income citizens and bridging the budget deficit, should the rate be approved at 14%.
Furthermore, El-Garhy said that the government will take measures to guarantee that no waves of inflation occur once the tax is imposed.
Parliament’s Economic Affairs Committee plans to meet on Monday with El-Garhy and his Deputy for Tax Studies Amr Al-Monier to discuss the impact of applying the VAT.
Al-Monier earlier said that 14% is a good rate and will have no impact on food commodities, as most of them will be exempted.
Meanwhile, MP Amr El-Gohary said that the government is unable to impose controls to protect Egyptians from greedy traders, hence, it should prepare a package of regulations to control the market and protect citizens.
