The application of the value-added tax (VAT) law will lead to higher taxes on cars with capacities less than 1,000 litres, said Salah Yousef, Chairman of the Central Research Administration of the Egyptian Tax Authority (ETA).
Yousef added, during the second session of the annual Egypt Automotive Summit held by Business News corporation on Tuesday, that the increase to be imposed on this category of cars will range between 1% and 2% at least, while the tax currently stands at 10%
He also highlighted the taxes currently imposed on other categories of vehicles will be reconsidered due to the high sales tax imposed on them.
Yousef had previously explained that the VAT is calculated on cars that are currently subject to sales tax of up to 45%, specifically cars with a capacity of more than 1600 CC. It will include the customs value, rate of return, table tax, in addition to the value-added tax (VAT).
Yousef pointed out that the VAT law will subject the sectors of services and spare parts to the general tax rate, instead of the tax currently levied at 10%. It is of note that the proposed general rate for the VAT law ranges between 10% and 15%.