A new draft law has passed through the parliament’s approval detailing Details of proposed exemptions from “value added” tax. The law amends the value-added tax law by including tax exemptions and reductions for a number of goods and services. A set of items and services has become exempt from taxation and those include mill products except for fine flour and imported or fermented, as well as agricultural products sold in their condition, including seeds, seeds, seedlings, vegetables and fruits manufactured locally, except for juices and their concentrates, and foods prepared for animals, poultry, fish, preparations,etc excluding pet food, however.
The amendments included tax cuts for commercial stores in malls. The cut for the commercial stores went down to 10% instead of 14% on the condition that branding and customer contact represent 10% of the sales value of the store. The list of exemptions also included newsprint, printing and writing paper, as well as paper and metal coins in circulation, commemorative coins, and non-tourist water transport for people and air transport of people, and most importantly medicines and materials involved in the production of medicines issued by the Ministry of Health. The law draft included the goods and services exported through free zones, markets and economic zones of a special nature to the country to a zero percent tax as cleared by the Ministry of Finance. Any goods or services that are licensed in these areas are also subject to a zero tax rate with the one exception of passenger cars.
The amendments have put an article to refund the tax for those leaving the country and stated that leaving the country for a period not exceeding 3 months is entitled to recover the tax previously paid upon purchase, provided that the value of one invoice is not less than 1500 pounds. While excluding a set of goods and services from the VAT, the new law also introduced a new sector to the VAT. The amendments stipulated that advertising services are subject to value-added tax at a price of 14 %.
The amendments come as a relief after a significant tax increase on the main governmental services during the last trimester of 2020. It releases many sectors of a big 14% taxation, hopefully bringing the sectors more activity and growth. The main concern one can have is that the drop was not equivalent to the increase in prices and the inflation rates of last year. However, on the positive end of things, that drop in taxation affects most of the population and is new in its kind, making one hope for it to yield in more economic benefits