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Sep
24

Coalition of NGOs rejects government plans to apply VAT

Groups claim that tax applied on all products and services could ‘prejudice’ rights of citizens

By Doaa Farid

Daily News Egypt

A coalition of non-governmental organisations (NGOs) released a statement on Sunday, opposing the application of the value-added tax (VAT).

In that regard, the Egyptian Center for Economic and Social Rights (ECESR) and the Association for Freedom of Thought and Expression (AFTE), along with the General Syndicate of Sales Tax Workers and a number of independent trade unions and syndicates, sent a letter on 17 September to the President, Prime Minister, Minister of Finance, and head of Tax Authority.

The coalition said in their statement that, despite the fact that VAT is widely-applied in more than 130 countries, it is one of the taxes that “prejudice” the rights of the citizens as it is applied on all products and services, with the consumer eventually bearing the effect of the tax.

The government considered replacing the existing General Sales Tax with VAT; a type of consumption tax applied in the European Union that is placed on a product whenever value is added to a stage of production and at a final sale.

In their statement, the rights organisations blamed the government for not engaging the involved parties, such as economists, civil society organisations and employees of the Tax Authority, in the discussions of the draft law.

The statement also added that the government should disclose its plans to reform taxation policies, and also the economic plans and public policies, in the current fiscal year.

The application of the tax is expected to generate EGP 12.5bn in revenues, according to official estimates.

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