E-invoicing system for improving Egypt's business climate

 

E-invoicing system for improving Egypt's business climate

By Ahmed Kamel 

Seeking means to boost the nation’s business climate, the Finance Ministry has carried out a raft of measures to upgrade the taxation process, including an e-invoicing system aimed at increasing the state’s revenues and combating shadow economy.  

The electronic billing will be obligatory as of July 1, 2021. Minister of Finance Mohamed Maait has said that more than 100 local firms use an instant e-invoicing system, pointing out that all their transactions are incorporated with the newly installed system.

The minister has made it clear that all local administrative units, public service and economic entities and state-owned firms -- holding companies and their subsidiaries – will use e-invoicing system. A ministerial decree has obliged these aforementioned entities to use e-invoicing system in all transactions with the private sector as of July 1, 2021.

The first phase of applying the electronic invoice kicked off on November 15, with the participation of 134 corporate large taxpayers. The second phase is scheduled to start by mid-February, when some 350 firms will apply the system.

The new e-invoicing system is part of the nation’s plans to digitize all business transactions for full transformation into financial inclusion and tax automation.

The automation project is designed to cut time and cost of taxation procedures through electronic registration, accounting, revision and collection. 

The Finance Ministry is working on upgrading the tax system in a bid to increase revenues and combat evasion. The upgrading process will include training programs for tax officials and automation.

The tax revenues currently stand at around 72 per cent of the state's total financial resources.

The state’s revenues rose by 18.4 per cent to LE204 billion in the first quarter (Q1) of the fiscal year 2020/21. Taxes jumped by 11.7 per cent on the July-October period to LE214 billion, compared to LE119 billion on the same period a year ago, data from the Finance Ministry showed.

The state’s expenses rose by seven per cent to LE455.2 billion between July and October, up from LE427 billion on the same period a year earlier.

The state budget posted a primary surplus worth LE5.2 billion, or 0.1 per cent of GDP, on the July-October period, Finance Ministry data showed.