CAIRO: Pharmaceuticals will not be exempt from the value-added tax (VAT) in the current draft law, Youm7 reported Saturday.
An official in the Egyptian Tax Authority told Youm7 that after the Minister of Finance Hany Qadri saw that pharmaceutical prices would not be reduced if it were tax exempted, and the customer will not benefit, then it would not be exempt.
The Ministry of Finance is working on accelerating the completion of amendments to the draft law of the sales tax law to be converted totally to VAT.
Egypt aims to reap 30 billion EGP ($3.8 billion) from the application of the VAT law in the budget of fiscal year 2015/16.
In 2014, Qadri reportedly stated during a spring meeting for the International Monetary Fund and the World Bank that the Egypt aims, through the applying of legislative amendments to income taxes, to execute a number of necessary financial reforms to the Egyptian economy to improve the subsidy system, restore trust and to achieve financial and economic stability.
Such legislative amendments would include widening the tax base, imposing a VAT and rationing the subsidy for petroleum products, Qadri said.
The value-added tax is an accumulated tax imposed on the difference between the cost and the selling price of goods, which is an indirect tax that will increase the net receipt of taxes, he said.