Egypt's government collected 660 billion Egyptian pounds ($39.83 billion) in taxes in the 2018/2019 financial year, up 16.6 percent from the previous year, its finance minister said on Monday. In the 2017/2018 financial year, Egypt collected 566 billion pounds. Of total tax revenue collected in the 2018/2019 financial year, 309 billion pounds came from value-added tax (VAT), Minister Mohamed Maait said. The adoption of VAT has been part of a reform programme that was the basis for Egypt's $12 billion, three-year loan agreed with the International Monetary Fund in 2016. Maait said Egypt will form a committee to amend its VAT law and the country will also work to draft a new income tax law during the current financial year. However, he gave no details on what changes would be sought to either law. The VAT broadened the tax base in a country where the government struggles to collect income tax because of a large informal economy and widespread avoidance. Introduced at 13 percent for a year from September 2016 then raised to 14 percent, it replaced a sales tax that economists say was distorting the market. The VAT is a composite tax levied on the difference between the cost price and the sale price of domestic and imported goods. "We are seeking to draft a new income tax law during the current financial year," Maait told reporters. "We will put forward the law's initial draft within two months," he said, but gave no further details.
