A delegation from the International Monetary Fund (IMF) will visit Egypt during the first week of January in order to resume talks on the Value Added Tax (VAT) draft law, said a statement from Ministry of Finance on Sunday.
An official source at the ministry was quoted in the statement as saying that the draft VAT Bill will be ready on 24 January; it will be discussed internally before being subject to public discussion.
The implementation of the VAT is expected to increase tax revenues to EGP 130bn per year, announced Head of the Tax Authority Mamdouh Omar earlier in November. However, its application will require a considerable amount of time, said Minister of Finance Ahmed Galal in December.
Another delegation from the IMF consisting of two legal experts has left Cairo last Thursday after meeting with the finance ministry to discuss the VAT, the statement said.
According to the Tax Authority, tax revenues reached EGP 80.3bn from 1 July to 10 December. Income tax revenue amounted to EGP 51.1bn while sales tax revenue was valued at EGP 29.2bn.
Tax revenues are also expected to increase by around EGP 20bn after tax disputes are resolved once Presidential Decree 163 for 2013 is implemented; the decree allows for reconciliation between the Tax Authority and taxpayers, the authority stated.
Two years of negotiations between Egypt and the IMF over a $4.8bn loan have been suspended following the 3 July ouster of former president Mohamed Morsi. Deputy Prime Minister Ziad Bahaa El-Din attributed the halt in negotiations to the influx of financial assistance the country had received from Gulf states.
Gulf countries pledged financial aid packages to Egypt in July to help boost the economy, including $5bn from Saudi Arabia, $3bn from the UAE and $4bn from Kuwait, in the form of cash grants, deposits and petroleum products.
The IMF announced earlier in September that they are committed to helping the Egyptian people deal with their economic and financial challenges.
Egypt has reduced earlier in October the number of delegates attending the IMF annual meeting to consist only of diplomatic staff, including the Egyptian ambassador to Washington. Prime Minister Hazem El-Bebalawi said that this was in protest to the unfair treatment of the delegation by the international body.