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Political parties, NGOs reject parliament’s approval of VAT - Daily News Egypt

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Political parties, NGOs reject parliament’s approval of VAT

The value-added tax was approved by parliament in late August, and was set at a rate of 13% for the current fiscal year

Eleven political parties and non-governmental organisations (NGO) as well as several public figures condemned in a joint statement the value-added tax (VAT) draft law approved by parliament last week.

The statement criticised the approval of VAT, saying that its approval will cause further poverty and social inequality and also criticised ongoing price increases. It also criticised the government’s performance on the matter, depicting the administration as unwise in how it has controlled the country’s resources and expenditures.

Member of parliament Samir Ghataas told Daily News Egypt: ”The financial struggles we are currently facing are the result of international bank terms. Prices already increased by 30% prior to the VAT’s approval, and now it is expected that prices will increase by an additional 30% with the tax’s application.”

The parliament approved the VAT draft law on 28 August, with a rate of 13% set for the fiscal year 2016/2017. This rate is expected to increase to 14% for the next year.

Some MPs affiliated with the 25-30 Coalition rejected the VAT, and refrained from voting on its approval.

The VAT’s approval was met with rejection and criticism by MPs, different political parties, and Egyptians in general, especially the country’s dire economic situation. Those criticising the tax say that it will only worsen the economic situation.

The statement’s signatories explained that VAT has the potential to create more hardship for Egypt’s citizens, contrary to the government’s claims.

Following VAT’s approval, food, cars, and a number of other products will witness price increases. A number of essential items, such as baby formula, will be excluded from the VAT.

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