Article

2014-01-13 Africa North

Egypt to introduce a 10 to 12 percent VAT

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Posted by Fred 2014-01-13 00:00|| || Front Page|| [11131 views ] Top
File under: Arab Spring

#1 That should crush what's left of the Egyptian economy. But on the plus side, it's a boon for corruption and black market deals. Which ain't necessarily so bad - it kept the fUSSR afloat for a long time.

Posted by SteveS 2014-01-13 00:50|| 2014-01-13 00:50|| Front Page Top

#2 As I recall, the Egyptian economy has been gifts/loans from Saudi Arabia, et al since April of last year. Under the circumstances, how will a VAT change things?

Posted by trailing wife 2014-01-13 02:42|| 2014-01-13 02:42|| Front Page Top

#3 A more enlightened and progressive society might have adopted a national insurance scheme involving unreachable annual deductibles.

Posted by Besoeker 2014-01-13 04:07|| 2014-01-13 04:07|| Front Page Top

#4 I never understood where the "Value" came from in the Value Added Tax.

And it's a good way for the government to divert much of the revenue stream from their benefactors into their pockets.

Posted by gorb 2014-01-13 10:17|| 2014-01-13 10:17|| Front Page Top

#5 VAT also directly harms comparative advantage and is the worst possible tax.

It doesn't apply to land-speculation.

I plague of financial locusts has descended on Egypt.

I feel Egypt will also lose it's children to debt (like the west's have been).

Posted by Bright Pebbles 2014-01-13 14:07|| 2014-01-13 14:07|| Front Page Top

#6 > I never understood where the "Value" came from in the Value Added Tax.

IT'S A TAX ON WORKING. That's who adds value to goods.

Posted by Bright Pebbles 2014-01-13 14:08|| 2014-01-13 14:08|| Front Page Top

#7 Under the circumstances, how will a VAT change things?

It's true there have been big-ass aid-packages/loans/hand-outs/freebies/whatever from the Saudis which kept the Egyptian economy from cratering. But before the recent 'troubles', there were some attempts at economic reform - probably one of the reasons for the ex-Hosni.

The VAT comes on top of the recent sales tax. VATs are a nice way for a government to hoover money out of the economy, which is nice if you are the govt. But more money for the govt means less money for useful things.

VATs also tend to slow growth and have a huge compliance cost due to the record keeping burden (you get a tax credit for VAT on stuff you buy from your suppliers) Record keeping is a bigger burden for small businesses - the usual engine for job growth. Lots of records and administration overhead means more scamming and black market activity.

Posted by SteveS 2014-01-13 22:52|| 2014-01-13 22:52|| Front Page Top

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